Cloud IT infrastructure spend still going up amid Covid-19, says IDC


Times may change, but the song remains the same: IDC’s latest Worldwide Quarterly Cloud IT Infrastructure Tracker has pegged an increase in cloud spending with outlay on traditional infrastructure falling off a cliff.

The figures for Q1 2020 showed vendor revenue from sales of IT infrastructure products for cloud environments, including server, enterprise storage and Ethernet switch, went up 2.2% year on year, while non-cloud investments went down 16.3%.

The Covid-19 pandemic was naturally the primary driver behind IT spending – or the lack of it – during the quarter, with IDC noting the widespread remote working triggered demand for consumer and enterprise cloud-based services. Public cloud was the only segment which escaped a decline in spending year over year in Q1, breaking $10 billion in spend at a 6.4% uptick.

IDC expects spending on cloud infrastructure to overtake its non-cloud equivalent later this year, forecasting cloud spend to comprise 54% of overall IT infrastructure outlay. Public cloud infrastructure will represent more than two thirds (68.6%) of total cloud infrastructure spend by the year’s end, while private cloud will recover from its current decline to see 1.1% growth for the full year.

The leading vendors remain the usual suspects for racks and servers; Dell Technologies is the largest company with 17.4% market share for Q120 at $2.54bn quarterly revenues, ahead of HPE/New H3C Group (10.3% share, $1.5bn revenues). Inspur, Cisco, and Lenovo round off the top five, while original design manufacturers (ODMs) have increased market share to comprise almost a third (32.5%) of the market.

Much recent research has affirmed organisations’ greater cloud spending as a consequence of coronavirus; LogicMonitor found that 87% of IT decision makers saw the pandemic as hastening cloud initiatives, while Telstra found 93% of its respondents felt similarly. On the software side, a similar story emerges with videoconferencing software as a service (SaaS), as Synergy Research found Zoom was almost entirely responsible for the segment’s recent increases.

IDC added that longer term, spending on cloud IT infrasturcture is forecast to grow at a CAGR of 9.6%, hitting $105.6bn by 2024.

Interested in hearing industry leaders discuss subjects like this and sharing their experiences and use-cases? Attend the Cyber Security & Cloud Expo World Series with upcoming events in Silicon Valley, London and Amsterdam to learn more.

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  • James Bourne

    James has a passion for how technologies influence business and has several Mobile World Congress events under his belt. James has interviewed a variety of leading figures in his career, from former Mafia boss Michael Franzese, to Steve Wozniak, and Jean Michel Jarre. James can be found tweeting at @James_T_Bourne.

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