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IDC: A Slow First Quarter Won't Stop Overall Cloud Infrastructure Spending

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IDC: A Slow First Quarter Won't Stop Overall Cloud Infrastructure Spending

August 15, 2016
By Steve Anderson
Contributing Writer

The International Data Corporation (IDC (News - Alert)) recently brought out its Worldwide Quarterly Cloud IT Infrastructure Tracker report, and revealed that a soft first quarter of spending likely won't have that much impact on the rest of the year. What's more, the numbers we've already seen suggest some impressive new developments to come in 2016, with more likely to follow.

Cloud IT infrastructure covers a lot of waterfront, including things like servers and storage, Ethernet switches and more. Right now, projections suggest that the total spend will be up 15.5 percent to hit a grand total of $37.1 billion, an impressive number by most any scale. Those wondering if the storage and server numbers have been double-counted will be pleased to note that it was not.

The gains in cloud IT, meanwhile, will come with a cost for non-cloud spending, set to drop by 4.4 percent over the course of 2016. It will still account for the largest share of spending at 63.4 percent. Meanwhile, separating the two into public and private cloud infrastructure spending shows some differences; public cloud infrastructure will have the biggest gains, up 18.8 percent to $23.3 billion, and private cloud will follow up at 10.3 percent gains to reach $13.8 billion.

Regional differences will be surprisingly light, with spending expected to universally increase, albeit at different rates. Public cloud will also be the biggest driver of increase followed by private cloud spending, and across the entire picture, Ethernet switches will see the highest growth rate at 39.5 percent.

Growth won't slow at the end of this year, either, as IDC projects a 13.1 percent compound annual growth rate (CAGR) for cloud infrastructure through 2020, where spending will hit $59.5 billion total. That's almost half—48.7 percent—of all enterprise IT infrastructure spending.

The numbers by themselves display the kind of value we're talking about here, as the cloud infrastructure market makes impressive gains and looks to hold these gains for the next several years. That alone is something of a minor miracle, as the vagaries of just about any market help ensure that there won't be any shortage of ups and downs. IDC's projections, meanwhile, suggest almost universal ups in every geographical market for the foreseeable future. Given that we're talking about the cloud, a system that's delivering value for just about everyone from the largest corporations down to a company of 10 employees that's recently started a mobile workforce concept, it's rational to think spending here would explode. There are benefits for nearly any size corporation that puts the cloud to work, so it would almost be counter-intuitive not to see spending climb.

The cloud spending climb is likely a natural outgrowth of its sheer value; everyone wants it because everyone can get value from it, so everyone spends on it. The end result is a lot of gain for cloud infrastructure and quite a bit of change likely to follow.

Edited by Alicia Young

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