Worldwide Cloud IT Infrastructure Spending Grew 9.2% to $32.6 Billion

Worldwide Cloud IT Infrastructure Spending Grew 9.2% to $32.6 Billion

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Vendor revenue from sales of infrastructure products (server, storage, and Ethernet switch) for cloud IT, including public and private cloud, grew by 9.2% year over year to $32.6 billion in 2016, with vendor revenue for the fourth quarter (4Q16) growing at 7.3% to $9.2 billion, according to the IDC Worldwide Quarterly Cloud IT Infrastructure Tracker.

Cloud IT infrastructure sales as a share of overall worldwide IT spending climbed to 37.2% in 4Q16, up from 33.4% a year ago. Revenue from infrastructure sales to private cloud grew by 10.2% to $3.8 billion, and to public cloud by 5.3% to $5.4 billion. In comparison, revenue in the traditional (non-cloud) IT infrastructure segment decreased 9.0% year over year in the fourth quarter.

Private cloud infrastructure growth was led by Ethernet switch at 52.7% year-over-year growth, followed by server at 9.3%, and storage at 3.6%. Public cloud growth was also led by Ethernet switch at 30.0% year-over-year growth, followed by server at 2.4% and a 2.1% decline in storage. In traditional IT deployments, storage declined the most (10.8% year over year), with Ethernet switch and server declining 3.4% and 9.0%, respectively.

"Growth slowed to single digits in 2016 in the cloud IT infrastructure market as hyperscale cloud datacenter growth continued its pause," said Kuba Stolarski, research director for Computing Platforms at IDC. "Network upgrades continue to be the focus of public cloud deployments, as network bandwidth has become by far the largest bottleneck in cloud datacenters. After some delays for a few hyperscalers, datacenter buildouts and refresh are expected to accelerate throughout 2017, built on newer generation hardware, primarily using Intel's Skylake architecture."

From a regional perspective, vendor revenue from cloud IT infrastructure sales grew fastest in Japan at 42.3% year over year in 4Q16, followed by Middle East & Africa at 33.6%, Canada at 16.6%, Western Europe at 15.6%, Asia/Pacific (excluding Japan) at 14.5%, Central and Eastern Europe at 11.6%, Latin America at 9.9%, and the United States at 0.1%.

Top 5 Vendor Group, Worldwide Cloud IT Infrastructure Vendor Revenue, Q4 2016
(Revenues are in Millions, Excludes double counting of storage and servers)

Vendor Group

4Q16 Revenue (US$M)

4Q16 Market Share

4Q15 Revenue (US$M)

4Q15 Market Share

4Q16/4Q15 Revenue Growth

1. Dell Technologies

$1,587

17.3%

$1,645

19.2%

-3.5%

2. HPE/New H3C Group

$1,340

14.6%

$1,381

16.2%

-3.0%

3. Cisco

$1,032

11.3%

$838

9.8%

23.1%

4. Huawei

$416

4.5%

$258

3.0%

61.4%

5. IBM

$346

3.8%

$357

4.2%

-3.0%

5. Lenovo

$295

3.2%

$275

3.2%

7.3%

5. NetApp

$267

2.9%

$257

3.0%

3.9%

ODM Direct

$1,877

20.5%

$1,926

22.5%

-2.6%

Others

$2,014

28.1%

$1,613

25.1%

24.9%

Total

$9,173

100%

$8,549

100%

7.3%

IDC's Worldwide Quarterly Cloud IT Infrastructure Tracker

 

Top 5 Vendor Group, Worldwide Cloud IT Infrastructure Vendor Revenue, 2016
(Revenues are in Millions, Excludes double counting of storage and servers)

Vendor Group

2016 Revenue (US$M)

2016 Market Share

2015 Revenue (US$M)

2015 Market Share

2016/2015 Revenue Growth

1. Dell Technologies

$5,747

17.6%

$5,391

18.1%

6.6%

2. HPE/New H3C Group

$5,311

16.3%

$4,768

16.0%

11.4%

3. Cisco

$3,783

11.6%

$2,906

9.7%

30.2%

4. Huawei

$1,205

3.7%

$743

2.5%

62.3%

4. Lenovo

$1,097

3.4%

$990

3.3%

10.8%

4. IBM

$1,017

3.1%

$1,257

4.2%

-19.1%

4. NetApp

$1,007

3.1%

$1,036

3.5%

-2.8%

ODM Direct

$6,733

20.7%

$7,427

24.9%

-9.3%

Others

$6,694

20.5%

$5,327

17.8%

25.7%

Total

$32,594

100%

$29,845

100%

9.2%

IDC's Worldwide Quarterly Cloud IT Infrastructure Tracker

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