IDC forecasts 16.2% growth in servers, storage, Ethernet switches, etc., to $37.4 billion.

According to a recent forecast report by IDC (www.idc.com), global spending on IT infrastructure products (servers, storage, Ethernet switches) for building cloud environments is expected to increase by 16.2% in 2016, reaching $37.4 billion.

The report ('Worldwide Quarterly Cloud IT Infrastructure Forecast') stated that the public cloud data center sector is expected to grow by 18.6% to account for 62.6% of total spending, and that IT infrastructure spending for building off-premises cloud environments (public and private) is projected to reach $28.4 billion in 2016.

In comparison, spending on enterprise IT infrastructure for traditional, or non-cloud, environments is expected to decrease by 1.8% in 2016. However, traditional IT infrastructure spending is still projected to account for 63.1% of total enterprise IT infrastructure spending. This forecast excludes duplicate counting between servers and storage.

<Global Cloud IT Infrastructure Market Forecast 2015–2020, Source: IDC Worldwide Quarterly Cloud IT Infrastructure Tracker>

In 2016, IT infrastructure spending for off-premises cloud deployments is expected to grow at a double-digit rate across all regions worldwide. This indicates that IT investment is rapidly shifting toward off-premises IT resources. Similarly, IT infrastructure spending for private clouds in on-premises environments is projected to increase across all regions worldwide. Conversely, spending on non-cloud IT is expected to decline in most regions. Within total IT infrastructure spending for cloud environments (including both on- and off-premises), the Ethernet switch segment is expected to show the highest growth, expanding by 41.2%. Servers are projected to grow by 16.3%, while storage is expected to grow by 4.1%.

From a long-term perspective, IDC forecasts that spending on IT infrastructure for cloud environments will grow at an average annual rate of 13.6% from 2015 to 2020, reaching $60.8 billion in 2020 and accounting for 49.7% of total enterprise IT infrastructure spending. Off-premises cloud environments (public and private) are expected to account for 77.6% of this volume. Public cloud IT infrastructure spending is projected to show the fastest growth rate, averaging 15% annually. Conversely, non-cloud IT spending is expected to decline by an average of 1.8% annually during the forecast period.

Natalya Yezhkova, Director of the IDC Storage Systems Research Group, stated, “When enterprises consider optimizing IT operations and utilizing on-site and off-site resources, the cloud is considered one of the most important options,” adding that the demand for cloud services will continue to drive fundamental changes in IT infrastructure investment, ranging from on-premises to off-premises deployments. Director Yetsková further explained, “As public cloud data centers represent the deployment of off-premises IT infrastructure, spending in this sector is closely linked to the spending of public service providers, particularly hyperscale service providers.”

Eun-Sun Han, Director leading the Enterprise Research Group at IDC Korea, stated, “In the domestic market as well, while the non-cloud IT infrastructure market continues to show a downward trend in size, spending on cloud IT infrastructure is maintaining double-digit growth.” She explained, however, that while public cloud-related spending accounts for a larger share of the global cloud IT infrastructure market amidst the rapid growth of mega-cloud service providers, the domestic market is seeing a relatively larger market share for private cloud IT infrastructure spending as the establishment of private cloud environments, centered on large corporate groups, shows a spreading trend.