Spending on cloud IT infrastructure is on an unstoppable increase

The International Data Corporation (IDC) has just released its latest market study on cloud infrastructure.

According to the research, the sales of infrastructure products including servers, storages, and Ethernet switch increased by 45.5 percent year-on-year in the first quarter of this year. The revenue of the worldwide infrastructure market has now reached $12.9 billion. The International Data Corporation estimated that the total spending on cloud infrastructure will reach $57.2 billion in 2018, equaling a year-on-year growth of 21.3 percent.

Looking back at previous reports, it is clear that public cloud infrastructure has had its quarterly revenues doubled in the past three years. The revenue in the first quarter of 2018 is $9 billion, at the year-on-year growth rate of 55.8 percent.

The same figures of the private cloud market are $3.9 billion of revenue and 26.5 percent of growth rate. When we combine the revenues of the public and private cloud markets, they account for 46.1 percent of the total worldwide IT infrastructure spending. Last year, it was 41.8 percent.

Kuba Stolarski, Research Director at IDC commented, “Hyperscaler datacenter expansion and refresh continued to drive overall cloud infrastructure growth in the first quarter. While all infrastructure segments continued their strong growth, public cloud has been growing the most.”

IDC also predicts that this is going to be the trend of 2018. We are seeing more novel technologies like edge computing or machine learning. They will push more enterprise workloads to the cloud and increase the demand for higher density configurations of cores, memory, and storage.

If we take a closer look at the regional figures, we can see that revenues of cloud IT infrastructure increase by double digits across all regions. The fastest growing region is the Asia-Pacific (excluding Japan) where the year-on-year growth rate is 74.7 percent.

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The followings are the U.S with 43.6 percent, Middle East & Africa with 42.3 percent, the Central and Eastern Europe with 39.2 percent, Latin America with 37.7 percent, Canada with 29.4 percent, Western Europe with 26.1 percent, and finally Japan with 15 percent.

The estimated spending on cloud infrastructure in 2018 will be $57.2 billion with the public cloud taking 67 percent of the total. Public cloud will grow by 23.6 percent while private cloud will grow by 16.7 percent, year-over-year.

What about the tradition IT infrastructure, the non-cloud one? The growth rate of the tradition IT infrastructure market is estimated to be 4.3 percent. The reason for the low growth rate of this market is because enterprises are letting go of their legacy infrastructure. The non-cloud infrastructure market will account for 54 percent of the total end-user spending on IT infrastructure in 2018. The same figure in 2017 was 57.8 percent.

With the blooming of cloud computing and cloud adoption across all industries, the results of the report are no surprise to anyone. The growth rate in the next five year is expected to remain double digit for the cloud infrastructure markets.

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