Skip to main content

New Cloud Infrastructure Spend will Grow Rapidly in 2017

Cloud computing will gain significant new adoption in the large enterprise market, with growth coming from public cloud services and increased on-premises cloud IT infrastructure investment, as more CIOs execute their hybrid cloud strategies.

Total spending on IT infrastructure products -- server, storage, and networking -- for deployment in cloud environments will increase by 18.2 percent in 2017 to reach $44.2 billion, according to the latest worldwide market study by International Data Corporation (IDC).

Cloud Infrastructure Market Development

Of this spending, 61.2 percent will be on public cloud data centers, while off-premises private cloud environments will contribute 14.6 percent. Furthermore, spending on IT infrastructure for on-premises private cloud deployments will growth by 16.6 percent.

By comparison, spending on traditional -- i.e. non-cloud -- IT infrastructure will decline by 3.3 percent in 2017, but will still account for the largest share (57.1 percent) of overall enterprise spending.

"In the coming quarters, growth in spending on cloud IT infrastructure will be driven by investments done by new hyperscale data centers opening across the globe and increasing activity of tier-two and regional service providers," said Natalya Yezhkova, research director at IDC.


In 2017, spending on IT infrastructure for off-premises cloud deployments will experience double-digit growth across all regions in a continued strong movement toward utilization of off-premises IT resources around the world.

That said, 57.9 percent end user spending in 2017 will still go to on-premises IT infrastructure -- which combines on-premises private cloud and on-premises traditional IT investments. Within on-premises settings, all regions will see sustained movement toward private cloud deployments.

Ethernet switches will be fastest growing segment of cloud IT infrastructure, increasing 23.9 percent in 2017, while spending on servers and enterprise storage will grow 13.6 percent and 23.7 percent, respectively.

In all three technology segments, spending on private cloud deployments will grow faster than public cloud while investments on non-cloud IT infrastructure will decline.

Outlook for Cloud IT Infrastructure Investment

Long term, IDC expects that spending on off-premises cloud IT infrastructure will experience a five-year compound annual growth rate (CAGR) of 14.2 percent, reaching $48.1 billion in 2020. Public cloud data centers will account for 80.8 percent of this amount.

Combined with on-premises private cloud, overall spending on cloud IT infrastructure will grow at a 13.9 percent CAGR and will surpass spending on non-cloud IT infrastructure by 2020.

Spending for on-premises private cloud IT infrastructure will grow at a 12.9 percent CAGR, while spending on non-cloud IT (on-premises and off-premises combined) will decline at a CAGR of 1.9 percent during the same forecast period.

Popular posts from this blog

The AI Application Integration Challenge

Artificial intelligence (AI) has rapidly become the defining force in business technology development, but integrating AI into applications remains a formidable challenge. According to a recent Gartner survey, 77 percent of engineering leaders identify AI integration in apps as a major hurdle for their organizations. As demand for AI-powered solutions accelerates across every industry, understanding the tools, the barriers, and the opportunities is essential for business and technology leaders seeking to evolve. The Gartner survey highlights a key trend: while AI’s potential is widely recognized, the path to useful integration is anything but straightforward. IT leaders cite complexities in embedding AI models into existing software, managing data pipelines, ensuring security, and maintaining compliance as persistent obstacles. These challenges are compounded by a shortage of skilled AI engineers and the rapid evolution of AI technologies, which can outpace organizational readiness and...