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Friday, October 09, 2015

High-Profile CIOs Embrace Rapid Shift to Public Cloud

If there's one compelling point to take away from the Amazon "AWS re:Invent 2015" keynotes and commentary this week, then it's this -- the leading public cloud service providers know that the current economic trends favor their business model.

Moreover, the leading IT industry analysts are providing the statistical evidence that validates the notion that lower-cost hyperscale hardware and open source software is dramatically altering the underlying foundation for enterprise computing.

Therefore, the ongoing rapid shift to cloud computing by the bold trailblazers is assured. When the CIOs of traditional IT organizations -- such as General Electric and  Capital One -- say that their wholesale transition to a public cloud solution is now inevitable, the doubters prior questions about security seem like a moot point.

Whether it's a large domestic financial services provider or a huge multinational industrial company, the path to progress has become vividly clear. Mobile internet access has empowered a groundswell of forward-thinking agile application development, and those new apps will tap into the cloud for the raw computing cycles and data storage they require.

Proof-Positive: Cloud Infrastructure Outlook

Total spending on cloud IT infrastructure -- server, storage, and Ethernet switch, excluding double counting between server and storage -- will grow by 24.1 percent and will reach $32.6 billion in 2015.

This amount will account for a third of the overall end-user spending on enterprise IT infrastructure, that's up from 27.9 percent in 2014. In comparison, spending on IT infrastructure deployed in traditional, non-cloud, environments will decline by -1.6% in 2015 -- although at $66.8 billion it will remain the largest segment of the market.

"Numerous IDC surveys indicate growing interest among enterprise customers to cloud deployments across multiple IT domains," said Natalya Yezhkova, research director at IDC. "End users often cite the agility of IT infrastructure and economic reasons as drivers for cloud adoption, but we also expect that the proliferation of next generation applications born and run in the cloud will fuel its further growth."

Spending on private cloud IT infrastructure in 2015 will grow by 15.8 percent year over year to $12.1 billion, while spending on public cloud IT infrastructure will increase by 29.6 percent to $20.5 billion.


IDC expects that spending on cloud IT infrastructure in 2015 will grow across all regions except Central and Eastern Europe, which is disturbed by political and economic turmoil that is having a negative impact on IT spending.

For all three technologies -- server, storage and Ethernet switch -- growth in spending will exceed 20 percent, with spending on servers growing at the highest rate, 25.5 percent.

For the five-year forecast period, IDC expects that cloud IT infrastructure spending will grow at a compound annual growth rate (CAGR) of 15.1 percent and will reach $53.1 billion by 2019 accounting for 46 percent of the total spending on enterprise IT infrastructure.

At the same time, spending on non-cloud IT infrastructure will decline at -1.7 percent CAGR. Ongoing spending for public cloud IT infrastructure will grow at a higher rate than the spending on private cloud IT infrastructure -- at the rate of 16.3 vs 13.2 percent CAGR.

In 2019, IDC expects service providers will spend $33.6 billion on IT infrastructure for delivering public cloud services, while spending on private cloud IT infrastructure will reach $19.4 billion.