Global cloud IT infrastructure revenue grew by 14.5% to $7.7 billion in the second quarter of 2016.
This is according to the International Data Corporation (IDC) Worldwide Quarterly Cloud IT Infrastructure Tracker. It reveals vendor revenue from sales of infrastructure products such as server, storage and Ethernet switch for cloud IT, including public and private cloud, grew by 14.5% ahead of renewed hyperscale growth expected in the second half of 2016.
IDC notes 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% to $3.1 billion and to public cloud by 14.9% to $4.6 billion.
Kuba Stolarski, research director for computing platforms at IDC, says the hyperscale slowdown continued in the second quarter of 2016.
"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 data centres online around the globe, continued strength in private cloud deployments, and declines in traditional, non-cloud deployments," explains Stolarski.
The report reveals 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 server at 25.1%, while storage revenue for public cloud declined 6.2% year-over-year.
From a regional perspective, vendor revenue from cloud IT infrastructure sales grew fastest in Latin America at 44% year-over-year in 2Q16, followed by Western Europe (41.2%), Japan (35.4%), Canada (21.8%), Central and Eastern Europe (21%), Middle East and Africa (16.8%), Asia/Pacific (excluding Japan) at 15.8%, and the United States at 6.7%, says IDC.
According to Gartner, the worldwide public cloud services market is projected to grow 17.2% in 2016 to total $208.6 billion, up from $178 billion in 2015.
Gartner notes the highest growth will come from cloud system infrastructure services (infrastructure-as-a-service), which is projected to grow 42.8% in 2016.
Sid Nag, research director at Gartner, says: "Growth of public cloud is supported by the fact that organisations are saving 14% of their budgets as an outcome of public cloud adoption, according to Gartner's 2015 cloud adoption survey.
"However, the aspiration for using cloud services outpaces actual adoption. There is no question there is great appetite within organisations to use cloud services, but there are still challenges for organisations as they make the move to the cloud. Even with the high rate of predicted growth, a large number of organisations still have no current plans to use cloud services."
A Juniper report forecasts cloud services will be adopted by 3.6 billion consumers globally by 2018.
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.
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