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IDC report highlights changing IT spending patterns

07 Jul 2017

Resellers and vendors are facing dwindling demand for on-premise – non-cloud – IT infrastructure, but infrastructure sales for public cloud data centres are continuing to ramp up according to a new IDC report.

The Worldwide Quarterly Cloud IT Infrastructure Tracker shows demand for public and private cloud services is pushing total spending for servers, enterprise storage and Ethernet switches for deployment in cloud environments up, with IDC forecasting a 12.4% year on year in 2017, to US$40.1 billion.

Demand for infrastructure for cloud deployments will push cloud related infrastructure spend to 41.3% of overall end-user IT infrastructure spend, with non-cloud related spend dropping 4.6%, to 58.7%, in 2017.

Natalya Yezhkova, IDC enterprise storage research director, says enterprise adoption of hybrid and multi-cloud IT strategies and the proliferation of cloud-native applications and areas such as the internet of things, which embrace a cloud-first approach to supporting IT resources, will fuel further increases in end-user spending on services based IT.

“In turn, this move will be reflected in a shift of the overall spending on IT infrastructure from on-premises to off-premises deployments and from traditional IT to cloud IT,” Yezhkova says.

The industry analysts say public cloud data centres will account for the majority of the cloud infrastructure spend in 2017, at 60.7%, and will grow at the fastest rate year on year, at 13.8%.

Off premises private cloud environments will account for 14.9% of overall spending, and grow at 11.9%, with on-premises private clouds accounting for 62.2% of private cloud IT infrastructure and growing at 9.6% year on year in 2017.

Ethernet switches are forecast to be the fastest growign segment, clocking 25.8% year on year growth in 2017, with servers up 9.1% and enterprise storage up 12.0%. Across all three segments, IDC says spend on off-premises infrastructure will grow this year, but on-premises spend will decline across all three categories.

Over the five year forecast, IDC is forecasting spend on off-premises cloud IT infrastructure to grow at a CAGR of 11.0% to hit $45.7 billion in 2021, with public cloud data centres accounting for 79.8% of that, and growing at 11.0% CAGR.

Off premises private cloud infrastructure spend is expected to increase at an 11.3% CAGR.

Spend on on-premises private cloud IT infrastructure will grow at 10.5% CAGR, IDC says, while non-cloud IT spend for both on- and off-premises, will decline at a 3.1% CAGR.

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