As per the latest Worldwide Cloud-IT Infrastructure Market Forecast presented by IDC (International Data Corporation) there will be an increase in overall IT infrastructure spending on products such as servers, Ethernet switches and enterprise storage devices. These products that are primarily required to build cloud environments are predicted for increase in 2016 by 16.2%. The trend will account to spending of as much as $34.7 billion. Up to 62% of this spending will be credited to public cloud data centers which are displaying an annual growth rate of 18.6% at present.

IDC reported that in 2016 itself the expenditure of IT infrastructure being deployed in off-premises cloud environments i.e. public and private cloud data centers will reach up to $28.4 billion. On the contrary, enterprise IT infrastructure deployment relating to non-cloud, traditional environments will decrease by 1.8% in the same year. Interestingly, the latter will still contribute to 63.1% of end user spending. These figures do not include double counting between storage and server.

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The report suggested that there will be a major movement toward public cloud deployments all across the world leading to double digit growth for spending on IT resources and infrastructure. Also, when talking about on-premises settings, IT infrastructure spending on private clouds will go up in all regions. Ethernet switches will top the spending list with a growth rate of up to 41.2% which is the highest amongst three major IT infrastructure products. Following the growth trend in spending, server and storage will register growth rates of 16.3% and 4.1%, respectively.

A long term forecast was also put forward by IDC in its report where the American market research, analysis and advisory firm has predicted that in category of cloud environments the IT infrastructure is projected to display a CAGR (Compound Annual Growth Rate) of 13.6%. This will simply mean that in next 5 years we can expect this spending to move up to $60.8 billion which is 49.7% of the overall spending on enterprise IT infrastructure. The research firm also stated that public cloud IT infrastructure spending will register fastest growth rate of as much as 15% CAGR. At the same time non-cloud IT spending will decrease at a rate of 1.8% CAGR in the similar period.

Natalya Yezhkova, Research Director at IDC commented, “Cloud is one of the major options considered by end users as they think about optimization of their IT operations and utilization of on-site and off-site resources.”

Natalya Yezhkova is a research director within IDC's Storage Systems program
Natalya Yezhkova is a research director within IDC’s Storage Systems program

She added, “This demand for cloud services will continue to drive the underlying shift in IT infrastructure spending from on-premises to off-premises deployments. As public cloud datacenters represent the major segment of off-premises IT infrastructure deployments, overall spending done by this segment is closely tied to spending by public cloud service providers, in particular, hyperscale SPs.”

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