While IDC increased its forecast for both cloud and non-cloud IT spending for the full year 2020, investments in cloud IT infrastructure are still expected to exceed spending on non-cloud infrastructure, 54.8% to 45.2%. Most of the increase in spending will be driven by public cloud IT infrastructure, which is expected to slow in Q2 2020 but increase by 16% year-over-year to $52.4 billion for the full year.
Across the world, there were massive shifts to online tools in all aspects of human life, including collaboration, virtual business events, entertainment, shopping, telemedicine, and education. Cloud environments, and particularly public cloud, were a key enabler of this shift, according to IDC.
Spending on public cloud IT infrastructure increased 47.8% year-over-year in Q2 2020, reaching $14.1 billion and exceeding the level of spend on non-cloud IT infrastructure for the first time. Spending on private cloud infrastructure increased 7% year-over-year in Q2 2020 to $5 billion with on-premises private clouds accounting for 64.1% of this amount.
Spending on private cloud infrastructure will also experience softness in the second half of the year and will reach $21.5 billion for the full year, an increase of just 0.3% year over year.
IDC believes the hardware infrastructure market has reached the tipping point and cloud environments will continue to account for an increasingly higher share of overall spending
Storage Platforms, Ethernet Switches
As of 2019, the dominance of cloud IT environments over non-cloud already existed for compute platforms and Ethernet switches while the majority of newly shipped storage platforms were still residing in non-cloud environments. Starting in 2020, with increased investments from public cloud providers on storage platforms, this shift will remain persistent across all three technology domains
Within cloud deployment environments in 2020, compute platforms will remain the largest segment (50.9%) of spending at $37.7 billion while storage platforms will be the fastest growing segment with spending increasing 21.2% to $27.8 billion, and the Ethernet switch segment will grow 3.9% year over year to $8.5 billion.
U.S., China, EMEA
Spending on cloud IT infrastructure increased across all regions in Q2 2020. The two largest regions, China and the U.S., were delivering the highest annual growth rates at 60.5% and 36.9% respectively. In all regions except Central & Eastern Europe and the Middle East & Africa, growth in public cloud infrastructure exceeded growth in private cloud IT.
Long term, IDC expects spending on cloud IT infrastructure to grow at a five-year compound annual growth rate (CAGR) of 10.4%, reaching $109.3 billion in 2024 and accounting for 63.6% of total IT infrastructure spend. Public cloud data centers will account for 69.4% of this amount, growing at a 10.9% CAGR. Spending on private cloud infrastructure will grow at a CAGR of 9.3%. Spending on non-cloud IT infrastructure will rebound after 2020 but will continue to decline overall with a CAGR of -1.6%.
IDC’s Worldwide Quarterly Cloud IT Infrastructure Tracker is designed to provide clients with a better understanding of what portion of the server, disk storage systems, and networking hardware markets are being deployed in cloud environments. The Tracker breaks out each vendors’ revenue by the hardware technology market into public and private cloud environments for historical data and provides a five-year forecast by the technology market.
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