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Market Foresight

Worldwide Cloud IT Infrastructure Revenue Tripled in the Last 4 Years

Vendor revenue from sales of infrastructure products (server, storage, and ethernet switch) for cloud IT, including public and private cloud, grew 25.8 percent year-over-year (Y-o-Y) in the second quarter of 2017 (2Q17), reaching USD 12.3 billion, estimates IDC. Public cloud infrastructure revenue grew 34.1 percent Y-o-Y and now represents 33.5 percent of total worldwide IT infrastructure spending at USD 8.7 billion, up from a 27.0 percent share 1 year ago. Private cloud revenue reached USD 3.7 billion for an annual increase of 9.9 percent. Total worldwide cloud IT infrastructure revenue has almost tripled in the last 4 years, while the traditional (noncloud) IT infrastructure revenue continues to decline and is down 3.8 percent from a year ago, although it still represents 52.4 percent of the worldwide share of overall IT revenue at USD 13.6 billion for the quarter.

Public cloud now represents 70.2 percent of the total cloud IT infrastructure revenue. The market with the highest growth in the public cloud infrastructure space was enterprise storage systems with revenue up 30.4 percent compared to the same quarter of the previous year, and making up over a third of the revenue in public cloud. Server and ethernet switch public cloud IT infrastructure revenues were up 24.6 percent and 26.8 percent respectively. Private cloud infrastructure spending continues to be driven by the server market, which has remained nearly 60 percent of the revenue in that space for the past 18 quarters.

Except for Latin American revenue that declined 13.1 percent from a year ago, all other regions in the world experienced double-digit revenue growth in the Cloud IT Infrastructure space compared to last year. Asia-Pacific (excluding Japan) and Western Europe led growth with rates of 30.5 percent and 33.4 percent, respectively. Canada (25.1 percent), Middle East & Africa (28.4 percent), and the United States (24.8 percent) had annual growth in the mid-twenties, while Central and Eastern Europe’s (16.9 percent) and Japan’s (10.4 percent) growth was below 20 percent but still in double digits.

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