Cloud IT Infrastructure Spending Poised for Big Growth

By Ellen Muraskin

Cloud IT infrastructure spending will take up a third of all IT infrastructure spending in 2015, according to IDC’s latest Worldwide Quarterly Cloud IT Infrastructure Tracker, announced July 6.

Counting all server, storage and Ethernet switch investment, it will grow by 26.4 percent this year to vault from 2014’s $28.1 billion to reach $33.4 billion. Private-cloud spend should grow by 16.8 percent year over year to account for $11.7 billion of that figure, and public cloud by 32.3 percent for the rest: $21.7 billion. 

Non-cloud IT infrastructure is predicted to remain flat, at $67 billion.

Looking five years out, IDC sees cloud IT equipment spending growing at a compound annual growth rate (CAGR) of 15.6 percent, reaching $54.6 billion by 2019; $35.3 billion of that for public cloud, and $19.2 billion for private. While by this time cloud IT spending will account for 46.5 percent of the infrastructure market, non-cloud declines at a -1.4 percent CAGR, and public cloud grows slightly faster – at 16.5 percent CAGR – than private cloud, at 14 percent. 

iCharts

A report released last week, looking at growth by quarter, found that all global regions except for Central and Eastern Europe – distracted by political turmoil – showed strong year-over-year growth in public and private cloud IT infrastructure investment, with an acceleration in the previous quarter.  

The top four cloud infrastructure vendors in both market share and first-quarter 2015 growth were HP, Dell, Cisco, and EMC, in that order. 

As everyone from CIOs down to mom-and-pops looks to shed servers in favor of cloud, and app vendors similarly look to shift their businesses to cloud subscription models, enterprises (and their channel partners) may be increasingly receptive to an ancillary software as a service: cloud expense management. In the same week IDC released its report, Fortune reported that Microsoft is raising prices on its Azure public cloud, first in the Eurozone and Australia. With the cloud argument won, the era of drastic cost competition may soon come to an end.