Cloud IT Spending to Edge Out Traditional Data Centers by 2020
The IT solutions market for cloud providers has nowhere to go but up.
A new forecast from IDC predicts that cloud IT infrastructure spending on servers, storage and network switches will jump 18.2 percent this year to reach $44.2 billion. Public clouds will generate 61 percent of that amount and off-premises private clouds will account for nearly 15 percent.
IDC research director Natalya Yezhkova, said that over the next few 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,” in a statement.
Additionally, businesses are also growing more adept at floating their own private clouds, she said. “Another significant boost to overall spending on cloud IT infrastructure will be coming from on-premises private cloud deployments as end users continue gaining knowledge and experience in setting up and managing cloud IT within their own data centers.”
Despite a 3 percent decline in spending on non-cloud IT infrastructure during 2017, the segment will still command the majority (57 percent) of all revenues. By 2020, however, the tables will turn.
Combined, the public and private data center infrastructure segments will reach a major tipping point in 2020, accounting for nearly 53 percent of the market, compared to just over 47 percent for traditional data center gear. Public cloud operators and private cloud environments will drive $48.1 billion in IT infrastructure sales by that year.
Indeed, the cloud computing market is growing by leaps and bounds.
The shifting sands are both predictable and evolutionary. Dominant data center spending has been platform specific and somewhat captive. As public cloud providers demonstrated, efficient data center operations are being deployed with white box platforms and high performance open -source software stacks that minimize costs and eliminate software bloat. Corporate IT professionals didn’t miss this evolution and have begun developing similar IT infrastructures. They are sourcing white box platform’s which are much less costly than branded platforms and combining them with open-source software including operating systems, software defined storage with data reduction that drives down storage consumption too. The result is a more efficient data center with less costly hardware and open-source software that drives down acquisition and operating costs.
The shift is occurring and the equilibrium between public and private clouds will change. Not just because of hardware but increasingly because of open-source software and the economic impact it has on building high density data centers that run more efficiently than the branded platforms.