Cloud IT Infrastructure Market Hit $8B in 1Q17 Revenue

by Sean Michael Kerner

While server revenues are under pressure, Cloud IT infrastructure is growing at a double-digit pace.

Cloud now accounts for an increasing share of the global IT spend, according to IDC's first quarter 2017 Worldwide Quarterly Cloud IT Infrastructure Tracker.

For the quarter, total worldwide cloud infrastructure revenue was reported at $8 billion, for a 14.9 percent year-over-year gain. From a macro perspective, cloud IT infrastructure spending now represents 39 percent of overall worldwide IT spending, up from 33.9 percent in the first quarter of 2016.Cloud IT Infrastructure Market

"Overall, the first quarter set a strong beginning of the year for the cloud IT infrastructure market," Natalya Yezhkova, research director for Enterprise Storage at IDC, said in a statement. "With positive dynamics in purchasing activity by hyperscalers across all technology segments, we expect a strong year ahead for the fastest growing public cloud segment."

"And as end users continue to embrace the benefits of private cloud infrastructures, spending in this segment will also expand," Yezhkova continued.

The growth of cloud revenue is coming at different rates, depending on the infrastructure segment. Infrastructure sales to enable private cloud deployments in the first quarter of 2017 were reported $3.1 billion in revenue, for a 6.0 percent year-over-year gain.

Public cloud infrastructure revenues in contrast is growing significantly faster, with first quarter revenue of $4.8 billion, for a 21.7 percent improvement over the first quarter of 2016.

Where Cloud Infrastructure Operators Are Spending Their Money

Public cloud and private cloud infrastructure operators are spending money in different areas as well. According to IDC, in the private cloud market, Ethernet switch sales grew the most at 15.5 percent, followed by storage at 10.0 percent.

In contrast, public cloud operators are increasing their spending the most on storage, which grew by 49.5 percent, followed by Ethernet switches at 22.7 percent.

Looking at the vendor mix for cloud infrastructure revenue, the top vendor is Dell with a 16.2 percent market share in the first quarter, although ODM direct manufacturers are growing significantly faster.

Sean Michael Kerner is a senior editor at ServerWatch and InternetNews.com. Follow him on Twitter @TechJournalist.

This article was originally published on Friday Jun 30th 2017
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