Industry News from Cloud IT

Huge Growth in Cloud IT Infrastructure as Hyperscale Returns

October 12, 2016

It could be forgiven for those who thought that cloud IT infrastructure spending might boil off a bit because most everyone who wanted such systems had them in place already. That's not the case, though, as new reports from International Data Corporation (IDC) suggest that the second quarter of 2016 saw big growth in cloud IT infrastructure, and there might be more to come.


The IDC report, Worldwide Quarterly Cloud IT Infrastructure Tracker, showed that vendor revenue from infrastructure product sales was up 14.5 percent as compared to the second quarter of 2015. With the second quarter pulling in $7.7 billion alone, it was likely to be just a start, as the report also projected a return to hyperscale growth for 2016's second half.

Cloud IT infrastructure sales accounted for 34.9 percent of the market in 2016's second quarter, up from 30.6 percent in 2015's second quarter. Revenue on those sales was likewise up, reaching $3.1 billion, a 14 percent increased over the previous year. Even public cloud infrastructure gained ground, up 14.9 percent to reach $4.6 billion.

About the only loser in this particular market was the market for traditional, non-cloud IT infrastructure, which lost 6.1 percent over the same time last year. Gains were seen in Ethernet switches, in storage, in servers, and in pretty much every part measured in the cloud market. Losses were across the board in the non-cloud market, meanwhile.

IDC's research director for computing platforms, Kuba Stolarski noted, “In general, the second quarter did not have as difficult a compare to the prior year as the first quarter did, and this helped improve growth results across the board compared to last quarter. In the second half of 2016, IDC expects to see strengthening in public cloud growth as key hyperscalers bring new datacenters online around the globe, continued strength in private cloud deployments, and declines in traditional, non-cloud deployments.”

Considering that we're half done with the second half of 2016—the fourth quarter only started about two weeks ago—there should be some evidence that hyperscale is making a comeback, though it might take a while to analyze the evidence that's currently in place to see if that projected comeback even started. Plus with two and a half months left to the year, there's still plenty of evidence to gather. While hyperscale may not make all that big of a comeback, there's no doubt that cloud in general is doing quite well, and much of this infrastructure may be going to accommodate users' ever-increasing demand for cloud systems.

While IDC's projections may not pan out exactly as expressed, it's certainly got the right general idea; cloud is on the rise, and it likely will be so for some time to come. As old infrastructure needs replaced and updated, new infrastructure will be in demand. 




Edited by Stefania Viscusi

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