Spending on Public Cloud Will Return to Double-Digit Growth in 2017

Total spending on IT infrastructure products (server, enterprise storage, and Ethernet switches) for deployment in cloud environments will increase 15.3% year over year in 2017 to $41.7 billion, according to IDC Worldwide Quarterly Cloud IT Infrastructure Tracker forecast.

Public cloud datacenters will account for the majority of this spending, 60.5%, while off-premises private cloud environments will represent 14.9% of spending. On-premises private clouds will account for 62.3% of spending on private cloud IT infrastructure and will grow 13.1% year over year in 2017.

Investments in cloud IT infrastructure will increase across all regions while the majority of regions expect to see a reduction in spending on non-cloud deployments across all three technology segment. Overall, worldwide spending on traditional, non-cloud, IT infrastructure will decline 5.3% in 2017. However, it will still account for the largest share, 57.9%, of end user spending.

In cloud environments, Ethernet switches will be the fastest growing technology segment at 21.8% year over year growth in 2017, while spending on servers and enterprise storage will grow 17.9% and 10.7%, respectively. An important factor in the slowdown of spending on enterprise storage is the weakness in the external storage segment amid continuous adoption of server-based and software-defined storage solutions. In all three segments, spending on IT infrastructure deployed off-premises will be growing faster than spending on on-premises environments.

Long term, IDC expects spending on off-premises cloud IT infrastructure will grow at a five-year compound annual growth rate (CAGR) of 11.7%, reaching $47.2 billion in 2021. Public cloud datacenters will account for 80.4% of this amount. Combined with on-premises private cloud, overall spending on cloud IT infrastructure will grow at an 11.4% CAGR and will surpass spending on non-cloud IT infrastructure by 2020. Spending on on-premises private cloud IT infrastructure will grow at a 10.3% CAGR, while spending on non-cloud IT (on-premises and off-premises combined) will decline at a 3% CAGR during the same period.