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 IT Infrastructure Spending Forecast Shows Cloud’s Share Accelerating

January 18, 2018 By Finley Engineering in

The movement of IT from traditional infrastructure to the cloud gained momentum during 2017, according to a new IT infrastructure spending forecast from IDC. The public cloud led the charge.

The firm’s Worldwide Quarterly Cloud IT Infrastructure Tracker is expected to find that spending on cloud infrastructure (which includes servers, enterprise storage and Ethernet switches) totaled $46.5 billion last year. That would represent a 20.9% year-over-year growth rate. Public cloud datacenters are expected to account for the lion’s share of spending (65.3%) and the fastest annual growth rate (26.2%). Off-premise private cloud environments will represent 13% of cloud IT spending and have an annual growth rate of 12.7%. The on premise subcategory of private cloud spending is expected to account for 62.6% of spending on private cloud IT infrastructure as a whole. The category will be found to have grown 11.5% year-over-year in 2017.

“As adoption of public cloud services and private cloud deployments continue to spread around the world replacing traditional on-premises hardware-centric IT settings, overall market spending on servers, storage, and networking will follow this move,” said Natalya Yezhkova, IDC’s Enterprise Storage research director in a press release. “The industry is getting closer to the point when cloud deployments will account for the majority of spending on IT infrastructure, which will be a major milestone embracing the benefits of service-centric IT.” 

IT Infrastructure Spending Forecast

IDC expects spending on Ethernet switches to grow by 22.2%, compute platforms by 22.1% and storage platforms by 19.2 %. Investments will be up in the public cloud, off-premise private cloud and on premise private cloud categories.

The traditional IT infrastructure story is not so happy. IDC predicts that final numbers for 2017 will show a decline of 2.7%.

IDC forecasts off-premise cloud infrastructure spending to have a compound annual growth rate (CAGR) of 12% during the five year period ending in 2021, when the total will reach $51.9 billion. Public cloud datacenters will be the largest segment with a CAGR of 12.1%. That segment will represent 82.1% of total off-premises cloud IT infrastructure spending. Off premise private cloud will have a CAGR of 11.7%.

Cloud IT infrastructure as a whole will have a five-year CAGR of 11.7% and pass non-cloud IT infrastructure spending in 2020. Spending on non-cloud IT infrastructure will have a negative CAGR of 2.7% during the five year period.