Worldwide cloud IT infrastructure revenue indicated a growth rate of 3.9% to $6.6 billion, following slowed demand from public cloud, in the first quarter of 2016.
This is according to the International Data Corporation (IDC) Worldwide Quarterly Cloud IT Infrastructure Tracker, which found vendor revenue from sales of cloud IT infrastructure products such as server, storage, and Ethernet switches, including public and private cloud, grew by 3.9% year over year on slowed demand from the hyperscale public cloud sector.
IDC says total cloud IT infrastructure revenues climbed to a 32.3% share of overall IT revenues in 1Q16, up from 30.2% a year ago.
"Revenue from infrastructure sales to private cloud grew by 6.8% to $2.8 billion and to public cloud by 1.9% to $3.9 billion. In comparison, revenue in the traditional (non-cloud) IT infrastructure segment decreased by 6.0% year over year in the first quarter, with declines in both storage and servers, and growth in Ethernet switch, says the report.
Kuba Stolarski, research director for Computing Platforms at IDC, says a slowdown in hyperscale public cloud infrastructure deployment demand negatively impacted growth in both public cloud and overall cloud IT.
"Private cloud deployment growth also slowed, as 2016 began with difficult comparisons to 1Q15, when server and storage refresh drove a high level of spend and high growth.
"As the system refresh has mostly ended, this will continue to push private cloud and, more generally, enterprise IT growth downwards in the near term. Hyperscale demand should return to higher deployment levels later this year, bolstered by service providers who have announced new datacentre builds expected to go online this year," explains Stolarski.
From a regional perspective, IDC found vendor revenue from cloud IT infrastructure sales grew fastest in the Middle East and Africa (MEA) at 25.9% year over year in 1Q16, followed by Western Europe at 20.6%, Asia/Pacific (excluding Japan) at 18.5%, Japan at 17.7%, and Canada at 9.5%.
A Juniper report forecasts cloud services will be adopted by 3.6 billion consumers globally by 2018.
"Despite the success of cloud-based storage providers attracting large numbers of users, they are failing to capture a significant percentage of premium subscribers. In contrast, music streaming services such as Spotify are claiming the lion's share of revenues, when compared to storage or games focused applications," reveals Juniper.
Kevin Krige, Advise Compute, BT Global Services SSA, says further research has shown that by 2018, at least half of IT spending will be on cloud-based services.
"However, many organisations still have barriers to overcome, especially around security and compliance concerns, where it has been reported that 32% of enterprises do not have the in-house skills to manage cloud migrations," he adds.
Gartner has revealed that nearly half of large enterprises will have hybrid cloud deployments by the end of 2017.
Thomas Bittman, vice president and analyst at Gartner, says organisations that are well on their way with private cloud projects rarely consider technology the major issue.
"Vendors are promoting private cloud computing as 'the next thing' for infrastructure and operations - and it is, but only for the right services. Virtualisation is a horizontal, very broad trend, impacting a high percentage of IT infrastructure. Private cloud is a specific style of computing that will leverage virtualisation, but is not appropriate for all services," he asserts.
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