Industry News from Cloud IT

IDC: A Rising Tide in Cloud Environments to Boost Everyone

April 15, 2016

In an economy that's starting to look downright shaky, depending on who you ask, the International Data Corporation (IDC) recently brought out some great news that reinforces the old saying about rising tides lifting all boats. IDC's word says that, in 2016, all regional markets will see gains in IT infrastructure spending as more companies put an increasing amount of resources behind cloud deployment tools.


The IDC report—the Worldwide Quarterly Cloud IT Infrastructure Tracker—notes that cloud deployment spending will increase to $38.2 billion by the end of 2016, representing a gain of 18.9 percent over 2015's numbers. Private cloud IT infrastructure is poised to increase 11.1 percent over last year, to $13.9 billion, and public cloud IT infrastructure will also grow, hitting $24.4 billion, or 14.1 percent over last year.

Within cloud IT infrastructure, some sectors will gain over others. Ethernet switches are set to rise 26.8 percent, followed by 12.4 percent for servers and 11.3 percent for storage options. The total IT infrastructure for cloud environment spending is set to see a 12.5 percent compound annual growth rate (CAGR) for the next five years, ultimately reaching $57.8 billion in 2020. That's almost half—47.9 percent—of the projected total spend for 2020, which is great news for anyone involved in the sector.

Amid all these tales of gains, one sector is set to drop off: enterprise IT infrastructure for non-cloud environments. This field will lose about four percent in 2016, but at least for now, it can console itself by representing a clear majority of user spending, and the largest share of same at 62.8 percent of the market.

New opportunities and new challenges; that's the best summary for a market in flux. While non-cloud environment infrastructure spending will still enjoy a clear majority of market spending, it may not be able to claim that for long. If the current decline stays static for just the next three years, it will be inches from losing that majority status. A fourth year and it will become a minority again, and that assumes the rate of decline only stays as it is. Those companies not already looking to build out in the growth directions may end up missing out altogether, as more companies decide on makers of choice in the near future.

The growth of cloud means a generally changing market for IT construction and consumption alike. Those who have prepared—or those who are finalizing preparations—should survive the move and come out ahead. Those who haven't will likely suffer, and we're already starting to see the fallout from a critical lack of insight. 



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