Skip to main content

Cloud Infrastructure Spending will Reach $36.8 Billion

The migration of IT workloads to public cloud service providers continues in 2015. Meanwhile, the forward-thinking enterprise CIOs are making plans to transform their data centers to accommodate the applications they intend to keep.

Maturation of cloud computing infrastructure and demand for sustainable benefits will drive the marketplace for new hardware and software components to a 14 percent CAGR from 2014 to 2018 -- reaching $36.8 billion -- according to the latest market study by Technology Business Research (TBR).

"Customers are increasingly integrating public and private cloud resources into day-to-day, mission-critical workloads and processes," said Krista Macomber, analyst at TBR.

However, TBR believes that securing, managing and integrating these complex heterogeneous cloud environments is very challenging.

For cloud components vendors, this means embracing more systems integrator partners and expanding their adoption of popular open-source cloud management tools are likely to be necessary steps to maximizing long-term growth opportunities.

Although low-cost, high-volume hardware vendors and legacy virtualization software providers have led cloud components opportunities in recent years, TBR says enterprise customers are beginning to increase their spend on operations management and security software -- as they complete their deployment of hybrid cloud environments.

As a result, vendors such as Cisco, HP and IBM that are driving toward a software-defined, open-source, multi-platform cloud components strategy are posting leading year-to-year growth rates and expanding revenue bases.

"IBM is a great case study in cloud components revenue trends. Plenty of opportunity remains for vendors to sell open and flexible hardware into a slew of cloud customer bases ranging from cloud service providers to small businesses. However, IBM has chosen to exit the x86 server space," Macomber explained.

Moreover, TBR reports that IBM continues to struggle with financial turbulence that will be troubling for multinational enterprise customers and channel partners that both seek signs of future stability, following the ongoing decline of IBM's legacy hardware and software business units.

While some vendors will choose acquisitions and organic development to round out their portfolio gaps, others will lean more heavily on partners to more quickly and cost-effectively fulfill end-customer requirements for open-source solutions that help to avoid vendor lock-in.

For all vendors, the TBR market study findings indicate evolving channel programs and restructuring direct sales or professional services teams -- to articulate cloud workload knowledge and DevOps culture expertise -- are critical to a vendor's ongoing success.

Popular posts from this blog

Shared Infrastructure Leads Cloud Expansion

The global cloud computing market is undergoing new significant growth, driven by the rapid adoption of artificial intelligence (AI) and the demand for flexible, scalable infrastructure. The recent market study by International Data Corporation (IDC) provides compelling evidence of this transformation, highlighting the accelerating growth in cloud infrastructure spending and the pivotal role of AI in shaping the industry's future trajectory. Shared Infrastructure Market Development The study reveals a 36.9 percent year-over-year worldwide increase in spending on compute and storage infrastructure products for cloud deployments in the first quarter of 2024, reaching $33 billion. This growth substantially outpaced non-cloud infrastructure spending, which saw a modest 5.7 percent increase to $13.9 billion during the same period. The surge in cloud infrastructure spending was partially fueled by an 11.4 percent growth in unit demand, influenced by higher average selling prices, primari