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Cloud driving infrastructure spend in 2016

13 Apr 2016

Spend on server, storage and Ethernet switches for deployment in cloud environments is expected to increase by 18.9% this year helping drive overall IT infrastructure spend.

IDC says spend on IT infrastructure products for deployment in cloud environments will hit US$38.2 billion in 2016. In comparison, spend on enterprise IT infrastructure deployed in traditional, non-cloud environments, will decline 4%.

However, non-cloud spend will still account for the largest share of end-user spend, at 62.8%.

The analyst firm says spend on public cloud IT infrastructure will see the largest growth, at 14.1%, to hit $24.4 billion. Private cloud IT infastructure spend is forecast to grow 11.1% year on year to $13.9 billion, geared towards on-premises private cloud deployments.

When it comes to the products themselves, Ethernet switches are expected to see the highest growth at 26.8%, with spending on servers and storage forecast to grow at 12.4% and 11.3% respectively.

IDC says as cloud service providers continue to expand their offerings and customer reach, the public cloud segment will deliver the highest rate of IT spending growth in most regions, compared to private cloud and non-cloud environments.

Longer-term, IDC says it expects spending on IT infrastructure for cloud environments to grow at a 12.5% five-year compound annual growth rate to $57.8 billion in 2020.

“This will represent 47.9% of the total spending on enterprise IT infrastructure in 2020,” IDC says.

Public cloud will experience a CAGR of 13.8% while private cloud IT infrastructure will see a CAGR of 10.2%, with IDC predicting service providers will spend $37.5 billion in IT infrastructure for delivering public cloud services by 2020.

The company says spending on private cloud IT infrastructure will hit $20.3 billion in 2020.

Spending on non-cloud IT infrastructure is expected to decline at a 1.3% CAGR during the same period.

Natalya Yezhkova, IDC research director for storage systems, says increased cloud offerings create new opportunities for businesses – for whom IT is not a core business but rather an enabler of their core business and operations – to create new business opportunities focused on their core competences while leveraging the flexibility of service-based IT.

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