Worldwide Cloud IT Infrastructure Revenue Grows 14.5% to $7.7 Billion in Q2 2016

Vendor revenue from sales of infrastructure products (server, storage, and Ethernet switch) for cloud IT, including public and private cloud, grew by 14.5% year over year to $7.7 billion in the second quarter of 2016 (2Q16), ahead of renewed hyperscale growth expected in the second half of 2016, according to the new report from IDC.

The overall share of cloud IT infrastructure sales climbed to 34.9% in 2Q16, up from 30.6% a year ago. Revenue from infrastructure sales to private cloud grew by 14.0% to $3.1 billion and to public cloud by 14.9% to $4.6 billion. In comparison, revenue in the traditional (non-cloud) IT infrastructure segment decreased 6.1% year over year in the second quarter.

Private cloud infrastructure growth was led by Ethernet switch at 49.4% year-over-year growth, followed by storage at 19.7%, and server at 8.9%. Public cloud growth was also led by Ethernet switch at 61.8% year-over-year growth, followed by the server at 25.1% while storage revenue for public cloud declined 6.2% year over year. In traditional IT deployments, server declined the most (7.5% year over year) with Ethernet switch and storage declining 2.2% and 2.0%, respectively.

"As expected, the hyperscale slow down continued in the second quarter of 2016," said Kuba Stolarski, research director for Computing Platforms at IDC. "However, deployments to mid-tier and small cloud service providers showed strong growth, along with private cloud buildouts. 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.

From a regional perspective, vendor revenue from cloud IT infrastructure sales grew fastest in Latin America at 44.0% year over year in 2Q16, followed by Western Europe at 41.2%, Japan at 35.4%, Canada at 21.8%, Central & Eastern Europe at 21.0%, Middle East & Africa at 16.8%, Asia/Pacific (excluding Japan) at 15.8%, and the United States at 6.7%.