IDC expects spending on IT infrastructure for public cloud deployments to return to double-digit growth this year

Total spending on IT infrastructure products (server, enterprise storage, and Ethernet switches) for deployment in cloud environments will increase 15.3% year over year in 2017 to $41.7 billion, according to a new forecast from the International Data Corporation (IDC) Worldwide Quarterly Cloud IT Infrastructure Tracker.

Public cloud datacenters will account for the majority of this spending, 60.5 percent, while off-premises private cloud environments will represent 14.9 percent of spending. On-premises private clouds will account for 62.3 percent of spending on private cloud IT infrastructure and will grow 13.1 percent year over year in 2017.

Investments in cloud IT infrastructure will increase across all regions while the majority of regions expect to see a reduction in spending on non-cloud deployments across all three technology segment. Overall, worldwide spending on traditional, non-cloud, IT infrastructure will decline 5.3 percent in 2017. However, it will still account for the largest share, 57.9 percent, of end user spending.

In cloud environments, Ethernet switches will be the fastest growing technology segment at 21.8 percent year over year growth in 2017, while spending on servers and enterprise storage will grow 17.9 percent and 10.7 percent, respectively.

An important factor in the slowdown of spending on enterprise storage is the weakness in the external storage segment amid continuous adoption of server-based and software-defined storage solutions. In all three segments, spending on IT infrastructure deployed off-premises will be growing faster than spending on on-premises environments.

Long term, IDC expects spending on off-premises cloud IT infrastructure will grow at a five-year compound annual growth rate (CAGR) of 11.7 percent, reaching $47.2 billion in 2021.

Public cloud datacenters will account for 80.4 percent of this amount. Combined with on-premises private cloud, overall spending on cloud IT infrastructure will grow at an 11.4 percent CAGR and will surpass spending on non-cloud IT infrastructure by 2020. Spending on on-premises private cloud IT infrastructure will grow at a 10.3 percent CAGR, while spending on non-cloud IT (on-premises and off-premises combined) will decline at a 3 percent CAGR during the same period.

“After the slowdown seen in 2016, we expect to see spending on IT infrastructure for public cloud deployments return to double-digit growth in 2017,” said Natalya Yezhkova, research director at IDC’s Storage Systems unit. “Growing demand for access to agile IT resources and proliferation of next generation workloads will continue driving adoption of cloud-based services. In turn, this move leads to a shift in IT infrastructure spending from traditional enterprise on-premises deployments to datacenters delivering cloud services and corporate private clouds.”

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