Global cloud IT infrastructure sector grows 8.1% to $8.4 billion in third quarter of 2016, IDC reveals

Research firm International Data Corporation (IDC) Worldwide Quarterly Cloud IT Infrastructure Tracker revealed Thursday that vendor revenue from sales of infrastructure products (server, storage, and Ethernet switch) for cloud IT, including public and private cloud, grew by 8.1 percent year over year to $8.4 billion in the third quarter of 2016. Ethernet switch continues to be the growth leader, as the market awaits new hyperscale datacenter builds to spur additional growth.

Private cloud infrastructure growth was led by Ethernet switch at 60.8 percent year-over-year growth, followed by storage at 9 percent, and server at 3.2 percent. Public cloud growth was also led by Ethernet switch at 46.2 percent year-over-year growth, followed by server at 6.8 percent storage at 3 percent year over year. In traditional IT deployments, server declined the most (12.9 percent year over year) with Ethernet switch and storage declining 1.6 percent and 8.6 percent, respectively.

The overall share of cloud IT infrastructure sales climbed to 39.2 percent of all IT infrastructure spending in the third quarter, up from 34.7 percent a year ago. Revenue from infrastructure sales to private cloud grew by 8.2 percent to $3.3 billion, and to public cloud by 8 percent to $5.1 billion. In comparison, revenue in the traditional (non-cloud) IT infrastructure segment decreased 10.8 percent year over year in the third quarter.

From a regional perspective, vendor revenue from cloud IT infrastructure sales grew fastest in Middle East & Africa at 36.7 percent year over year in the third quarter, followed by Japan at 29.9 percent, Latin America at 21.7 percent, Western Europe at 16.8 percent, Asia/Pacific (excluding Japan) at 11.9 percent, Canada at 5.3 percent, Central & Eastern Europe at 4.3 percent, and the United States at 2.9 percent.

“New cloud datacenters have begun to launch, but in the third quarter the effect on the cloud IT infrastructure market was minimal,” said Kuba Stolarski, research director for Computing Platforms at IDC. “As network upgrades continue to prop up cloud growth overall, the hyperscale cloud datacenters are coming and they will drive new server and storage deployments over the next few quarters. As OpenStack has become easier to implement and maintain by a growing population of capable system administrators, private cloud options are becoming more viable in an increasing set of use cases and with a wider set of deployment parameters.”


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