Infrastructure for Public Cloud Will Be Fastest Growing Segment in 2017

Infrastructure for Public Cloud Will Be Fastest Growing Segment in 2017
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According to a new forecast from the IDC , total spending on IT infrastructure products (server, enterprise storage, and Ethernet switches) for deployment in cloud environments will increase 12.4% year over year in 2017 to $40.1 billion.

Public cloud datacenters will account for the majority of this spending (60.7%) and will grow at the fastest rate year over year (13.8%). Off-premises private cloud environments will represent 14.9% of overall spending and will grow 11.9% year over year. On-premises private clouds will account for 62.2% of spending on private cloud IT infrastructure and will grow 9.6% year over year in 2017.

Increased spending on cloud IT infrastructure and decreasing investments in non-cloud IT infrastructure will be a common theme for all regions. Worldwide spending on traditional, non-cloud, IT infrastructure will decline 4.6% in 2017 accounting for 58.7% of the overall end-user spending on IT infrastructure products across the three segments, down from 62.6% in 2016.

In cloud IT environments, Ethernet switches will be the fastest growing technology segment with 25.8% year-over-year growth in 2017, while spending on servers and enterprise storage will grow 9.1% and 12.0%, respectively. These growth rates include double counting between server and storage to fully represent each of the technology segments. In all three technology segments, spending on IT infrastructure deployed off-premises will grow in 2017 while spending on on-premises environments will decline.

Over the five-year forecast, IDC expects spending on off-premises cloud IT infrastructure will have a compound annual growth rate (CAGR) of 11.0%, reaching $45.7 billion in 2021. Public cloud datacenters will account for 79.8% of this amount with an 11.0% CAGR, while spending on off-premises private cloud infrastructure will increase at an 11.3% CAGR.

Combined with on-premises private cloud, overall spending on cloud IT infrastructure will have a five-year CAGR of 10.9% and by 2020 will surpass spending on non-cloud IT infrastructure. Spending on on-premises private cloud IT infrastructure will grow at a 10.5% CAGR, while spending on non-cloud IT (on-premises and off-premises combined) will decline at a 3.1% CAGR during the same period.