IDC says 3Q18 cloud IT infra revenues beat traditional IT infra for first time

CLOUD adoption is certainly gaining among enterprises as shown by a study of the International Data Corporation (IDC).

In the IDC Worldwide Quarterly Cloud IT Infrastructure Tracker, the market analyst firm said for the first time, revenues of cloud IT infrastructure has overtaken those of traditional IT infrastructure.

The period cited is the third quarter of 2018 (3Q18), the IDC reported on January 10.

This and other information are contained in the study which reported that “vendor revenue from sales of IT infrastructure products (servers, enterprise storage, and Ethernet switch) for cloud environments, including public and private cloud, grew 47.2 percent year over year in the third quarter of 2018 (3Q18), reaching $16.8 billion.”

Cloud IT Infrastructure - Science and Digital News

Overall for 2018 as a result, IDC also raised its forecast for total spending, which is vendor revenue plus channel mark-up, on cloud IT infrastructure to $65.2 billion with year-over-year growth to the tune of 37.2 percent.

In relation with this, public cloud IT infrastructure spending has risen more than twice in the past two years at  $12.1 billion in 3Q18, posting a growth of 56.1 percent year over year.

On the other hand, private cloud IT infrastructure rose also but just slightly more than half at 28.3 percent of public cloud, spending $4.7 billion.

IDC started tracking IT infrastructure deployments in 2013 covering various environments, and found out that majority of cloud IT infrastructure spending has been on public cloud. In 2018 IDC expects this share will top up at 68.8 percent with spending on public cloud infrastructure growing at an annual rate of 44.7 percent.

In comparison, private cloud spending will grow 23.3 percent year over year in 2018.

While the 3Q18 figures raised cloud IT infrastructure spending to the top, IDC  does not see overall spending for entire 2018 to surpass traditional cloud IT infrastructure spending.

“In 3Q18, for the first time, quarterly vendor revenues from IT infrastructure product sales into cloud environments surpassed revenues from sales into traditional environments, accounting for 50.9 percent of the total worldwide IT infrastructure vendor revenues, up from 43.6 percent a year ago.

“However, for the full year 2018, spending on cloud IT infrastructure will remain below the 50 percent mark at 47.4 percent.

Cloud IT Infrastructure Market Forecast - Science and Digital News

Spending all three technology segments in cloud IT environments is forecast to deliver double-digit growth in 2018. Compute platforms will be the fastest growing at 59.1 percent, while spending on Ethernet switches and storage platforms will grow 18.5 percent and 20.4 percent, respectively,” said IDC.

Natalya Yezhkova, IDC research director for IT Infrastructure and Platforms, described the 3Q18 performance of cloud IT infrastructure as “exceptional.”

“The first three quarters of 2018 were expectional for the IT infrastructure market across all deployment environments and the increase in IT infrastructure investments by public cloud datacenters was especially strong driven by the opening of new datacenters and infrastructure refresh in existing datacenters,” she said.

“After such a strong year we expect some slowdown in 2019 as the overall market cools down and some cloud providers work through adjustments in their supply chain. However, IDC expects the shift in IT infrastructure spending toward cloud environments will continue.”

For the long-term, IDC sees cloud IT infrastructure spending increasing at a five-year compound annual growth rate (CAGR) — 13.3 percent — and climbing to $88.6 billion in 2022 and accounting for 57.6 percent of total IT infrastructure spend.

On the other hand, public cloud datacenters will have a portion of 66.3 percent from that figure, and grow at an 13.6 percent CAGR. Spending on private cloud infrastructure is seen to grow at a CAGR of 12.6 percent.

The market analyst firm’s tracker is aimed at providing clients with a better understanding of what portion of the server, disk storage systems, and networking hardware markets are being deployed in cloud environments. (EKU)











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