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T
he IT infrastructure industry is at
a crossroads in terms of product
sales to cloud vs traditional IT
environments, according to the International
Data Corporation (IDC).
IDC’s Worldwide Quarterly Cloud IT
Infrastructure Tracker showed vendor
revenue from sales of IT infrastructure
products (server, enterprise storage and
Ethernet switch) for cloud environments,
including public and private cloud, grew
11.4% year over year in the first quarter of
2019 (1Q19), reaching US$14.5 billion.
But IDC also lowered its forecast for total
spending on cloud IT infrastructure in 2019
to US$66.9 billion – down 4.5% from last
quarter’s forecast – with slower year-over-
year growth of 1.6%.
Vendor revenue from hardware infrastructure
sales to public cloud environments in 1Q19
was down 13.4% compared to the previous
quarter (4Q18) but increased 8.9% year
over year to US$9.8 billion.
This segment of the market continues to be
highly impacted by demand from a handful
of hyperscale service providers, whose
spending on IT infrastructure tends to have
visible up and down swings.
Spending on the three technology segments
in cloud IT environments is forecast to
deliver growth for Ethernet switches and
storage platforms while compute platforms
www.intelligentcio.com
are expected to decline in 2019. Ethernet
switches are expected to be the fastest
growing at 20.9%, while spending on
storage platforms will grow slightly at
1.9%. Meanwhile, compute platforms will
decline by 2.8% in 2019 but will remain the
largest category of spending on cloud IT
infrastructure at US$34.2 billion.
Sales of IT infrastructure products into
traditional (non-cloud) IT environments
remained flat compared to 1Q18, according
to IDC. For the full year 2019, worldwide
spending on traditional non-cloud IT
infrastructure is expected to decline by 3.5%,
as the technology refresh cycle that drove
market growth in 2018 is winding down.
By 2023, IDC expects that traditional non-
cloud IT infrastructure will only represent
42.4% of total worldwide IT infrastructure
spending (down from 51.9% in 2018). This
share loss and the growing share of cloud
environments in overall spending on IT
infrastructure is common across all regions.
Natalya Yezhkova, Research Vice President,
Infrastructure Systems, Platforms and
Technologies at IDC, said: “As the overall
IT infrastructure goes through a period of
slowdown after an outstanding 2018, the
important trends might look somewhat
distorted in the short term.
“IDC’s long-term expectations strongly
back continuous growth of cloud IT
infrastructure environments. With vendors
and service providers finding new ways of
delivering cloud services, including from
IT infrastructure deployed at customer
premises, end users have fewer obstacles
and pain points in adopting cloud/services-
based IT.”
“
WITH VENDORS
AND SERVICE
PROVIDERS
FINDING NEW
WAYS OF
DELIVERING
CLOUD SERVICES
. . . END USERS
HAVE FEWER
OBSTACLES AND
PAIN POINTS
IN ADOPTING
CLOUD/SERVICES-
BASED IT.
INTELLIGENTCIO
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