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Cloud Spending Forecast to Reach $37 Billion in 2016

October 25, 2016 By Finley Engineering in

A bullish cloud spending forecast comes from IDC. Global spending on cloud IT infrastructure products – server, enterprise storage and Ethernet switches – will increase 16.2% to $37.4 billion this year, according to the market research firm. Spending for public cloud data centers will increase 18.6% and account for the majority (62.5%), IDC says.

Global IT infrastructure spending in off-premises cloud environments, both public and private, will rise to reach $28.4 billion this year, IDC highlights in a press release.

Cloud Spending Forecast

Globally, spending on enterprise IT equipment deployed in traditional, non-cloud environments will decrease 1.8% in 2016. This will still account for the largest share (63.1%) of total end-user spending, however.

Spending on off-premises cloud IT infrastructure will grow at double digit rates across all world regions, IDC expects. Spending in on-premises, private cloud infrastructure will increase as well.

In terms of cloud IT equipment, spending on Ethernet switches will grow at the highest annual rate, 41.2%, while spending on servers and storage will increase 16.3% and 4.1%, respectively, according to IDC.

Longer term, IDC expects cloud IT infrastructure spending will grow at a 13.6% CAGR to reach $60.8 billion in 2020, 49.7% of total enterprise IT infrastructure spending globally. Spending on equipment for off-premises cloud environments will account for 77.6% of the total.

Spending on public cloud IT infrastructure will grow at the highest rate, a 15% CAGR. Spending for non-cloud IT will decrease at a 1.8% CAGR over the period.

“Cloud is one of the major options considered by end users as they think about optimization of their IT operations and utilization of on-site and off-site resources,” commented Natalya Yezhkova, IDC research director, Storage Systems. “This demand for cloud services will continue to drive the underlying shift in IT infrastructure spending from on-premises to off-premises deployments.

¨As public cloud data centers represent the major segment of off-premises IT infrastructure deployments, overall spending done by this segment is closely tied to spending by public cloud service providers, in particular, hyperscale SPs.”