Cloud Data Centers Look for More Spending Growth

By Steve Anderson
Contributing Writer

The move from the local data center to its cloud-based equivalent has—as many hardware changes do—generated both opportunity and challenge. Challenge for the software companies still running as they did in the PC era, as well as the suppliers of hardware geared toward the local data center. For hardware companies that have made the transition to cloud-based systems, however, opportunity is at hand, and a new report from IDC (News - Alert) suggests major gains ahead for cloud data centers.

2015 was a year of double-digit growth in big cloud spending, as the numbers were up 22 percent on the previous year to reach nearly $29 billion. IDC projections suggest that cloud-related computing hardware will clear $38 billion, and that won't be the end of it. Such growth is likely to continue for “the next several years,” reports note, with public cloud operations infrastructure spending to hit $37.5 billion by 2020.

Some major beneficiaries of this trend are hardware makers like Cisco (News - Alert), whose cloud-related products saw a 36 percent jump in value during the fourth quarter, hitting $802 million. Hardware makers won't have it all their own way as major cloud operators like Amazon and Facebook (News - Alert) are building their own in-house systems. Essentially, it's been a field of major change, as companies start asking questions of “if” related to cloud operations and switch over to “when,” meaning a growing spike in demand for the systems that make these moves happen.

It's almost like what happened with PCs when tablets and smartphones came in. While there's still a market for laptops and desktop PC use—just ask any PC gamer—it's on the decline from previous years. Instead of the industry standard, the rise of the mobile workforce and similar measures means a lot more is getting done on more portable devices. The mobile workforce has likewise meant a need for ways to access data when outside of the company's property, and the cloud has delivered in grand style. So for those companies that made modifications accordingly, there's great success afoot. Those who didn't are foundering.

The old cliché is that the one constant in business is change, and we're getting a good look at that right here. A mobile workforce, greater cloud moves, and more are making some companies major successes and others barreling downward. Those who prepare are likely to come out ahead in the end, and it's a move that reminds us all of the importance of being ready for change.