Vendor revenue from sales of cloud IT infrastructure products, 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.
This is according to the International Data Corporation (IDC) Worldwide Quarterly Cloud IT Infrastructure Tracker, which found cloud IT infrastructure (server, storage, and Ethernet switch) sales as a share of overall global 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, adds the report.
"Growth slowed to single digits in 2016 in the cloud IT infrastructure market as hyperscale cloud data centre 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 data centres. After some delays for a few hyperscalers, data centre buildouts and refresh are expected to accelerate throughout 2017, built on newer generation hardware, primarily using Intel's Skylake architecture."
In comparison, IDC says, 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.
From a regional perspective, notes IDC, vendor revenue from cloud IT infrastructure sales grew fastest in Japan at 42.3% year over year in 4Q16, followed by Middle East and 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 US at 0.1%.
Research firm, Gartner says more than $1 trillion in IT spending will be directly or indirectly affected by the shift to cloud during the next four years. This will make cloud computing one of the most disruptive forces of IT spending since the early days of the digital age.
"Cloud-first strategies are the foundation for staying relevant in a fast-paced world," says Ed Anderson, research vice president at Gartner. "The market for cloud services has grown to such an extent that it is now a notable percentage of total IT spending, helping to create a new generation of start-ups and 'born in the cloud' providers."
Meanwhile, NetApp's industry cloud adoption research reveals over half of CIOs and IT managers across the globe have identified hybrid cloud as the most common digital transformation adoption. Only 3% of all respondents claim they are not using any cloud services or are only planning to use them.
"IT leaders look to the cloud to boost innovation. We believe that they should focus on three things to be successful, and these are choice, control and agility," said Martin Warren, cloud solutions marketing manager, EMEA, at NetApp.
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