Worldwide Cloud IT Infrastructure Revenues Continue to Grow by Double Digits in the First Quarter of 2018 as Public Cloud Expands, According to IDC

According to the International Data Corporation (IDC)
Worldwide
Quarterly Cloud IT Infrastructure Tracker, vendor revenue from sales
of infrastructure products (server, storage, and Ethernet switch) for
cloud IT, including public and private cloud, grew 45.5% year over year
in the first quarter of 2018 (1Q18), reaching $12.9 billion. IDC also
raised its forecast for total spending on cloud IT infrastructure in
2018 to $57.2 billion with year-over-year growth of 21.3%.

Public cloud infrastructure quarterly revenue has more than doubled in
the past three years to $9.0 billion in 1Q18, growing 55.8% year over
year. Private cloud revenue reached $3.9 billion for an annual increase
of 26.5%. The combined public and private cloud revenues now represent
46.1% of the total worldwide IT infrastructure spending, up from 41.8% a
year ago. Traditional (non-cloud) IT infrastructure revenue grew 22.0%
from a year ago, although it has been generally declining over the past
several years; at $15.1 billion in 1Q18 it still represents 53.9% of
total worldwide IT infrastructure spending.

“Hyperscaler datacenter expansion and refresh continued to drive overall
cloud IT infrastructure growth in the first quarter,” said Kuba
Stolarski, research director for Infrastructure Platforms and
Technologies at IDC. “While all infrastructure segments continued their
strong growth, public cloud has been growing the most. IDC expects this
trend to continue through the end of 2018. Digital transformation
initiatives such as edge computing and machine learning have been
bringing new enterprise workloads into the cloud, driving up the demand
for higher density configurations of cores, memory, and storage. As
systems technology continues to evolve towards pooled resources and
composable infrastructure, the emergence of these next-generation
workloads will drive net new growth beyond traditional enterprise
workloads.”

All regions grew their cloud IT Infrastructure revenue by double digits
in 1Q18. Asia/Pacific (excluding Japan) grew revenue the fastest, by
74.7% year over year. Next were USA (43.6%), Middle East & Africa (MEA)
(42.3%), Central and Eastern Europe (CEE) (39.2%), Latin America
(37.7%), Canada (29.4%), Western Europe (26.1%), and Japan (15.0%).

1Q18Revenue(US$M)

1Q18 MarketShare

1Q17Revenue(US$M)

1Q17 MarketShare

1Q18/1Q17RevenueGrowth

Notes:

* IDC declares a statistical tie in the worldwide cloud IT
infrastructure market when there is a difference of one percent or less
in the vendor revenue shares among two or more vendors.**
Due to the existing joint venture between HPE and the New H3C Group, IDC
will be reporting external market share on a global level for HPE as
“HPE/New H3C Group” starting from Q2 2016 and going forward.

In addition to the table above, a graphic illustrating worldwide revenue
share for the top 5 cloud IT infrastructure providers in 1Q17 and 1Q18
is available by viewing this
press release on IDC.com.

IDC’s cloud IT infrastructure forecast measures total spend (vendor
recognized revenue plus channel revenue). Of the $57.2 billion in cloud
IT infrastructure spend forecast for 2018, public cloud will account for
67.0% of the total, growing at an annual rate of 23.6%. Private cloud
will grow at 16.7% year over year.

Worldwide spending on traditional non-cloud IT infrastructure is
expected to grow by 4.2% in 2018 as enterprises continue to refresh
their infrastructure. Traditional IT infrastructure will account for
54.0% of total end user spending on IT infrastructure products, down
from 57.8% in 2017. This represents a decelerating share loss as
compared to the previous four years. The growing share of cloud
environments in overall spending on IT infrastructure is common across
all regions.

Long-term, IDC expects spending on cloud IT infrastructure to grow at a
five-year compound annual growth rate (CAGR) of 10.5%, reaching $77.7
billion in 2022, and accounting for 55.4% of total IT infrastructure
spend. Public cloud datacenters will account for 64.7% of this amount,
growing at a 10.2% CAGR. Spending on private cloud infrastructure will
grow at a CAGR of 11.1%.

A graphic illustrating IDC’s five year worldwide IT infrastructure
forecast by deployment type (traditional datacenter, public cloud,
private cloud) is available by viewing this
press release on IDC.com.

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. This 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.

Taxonomy NotesIDC defines cloud services more formally
through a checklist of key attributes that an offering must manifest to
end users of the service. Public cloud services are shared among
unrelated enterprises and consumers; open to a largely unrestricted
universe of potential users; and designed for a market, not a single
enterprise. The public cloud market includes variety of services
designed to extend or, in some cases, replace IT infrastructure deployed
in corporate datacenters. It also includes content services delivered by
a group of suppliers IDC calls Value Added Content Providers (VACP).
Private cloud services are shared within a single enterprise or an
extended enterprise with restrictions on access and level of resource
dedication and defined/controlled by the enterprise (and beyond the
control available in public cloud offerings); can be onsite or offsite;
and can be managed by a third-party or in-house staff. In private cloud
that is managed by in-house staff, “vendors (cloud service providers)”
are equivalent to the IT departments/shared service departments within
enterprises/groups. In this utilization model, where standardized
services are jointly used within the enterprise/group, business
departments, offices, and employees are the “service users.”

IDC defines Compute Platforms as compute intensive servers. Storage
Platforms includes storage intensive servers as well as external storage
and storage expansion (JBOD) systems. Storage intensive servers are
defined based on high storage media density. Servers with low storage
density are defined as compute intensive systems. Storage Platforms does
not include internal storage media from compute intensive servers. There
is no overlap in revenue between Compute Platforms and Storage
Platforms, in contrast with IDC’s Server Tracker and Enterprise Storage
Systems Tracker, which include overlaps in portions of revenue
associated with server-based storage.

For more information about IDC’s Quarterly Cloud IT Infrastructure
Tracker, please contact Lidice Fernandez at 305-351-3057 or lfernandez@idc.com.

About IDC TrackersIDC
Tracker products provide accurate and timely market size, vendor
share, and forecasts for hundreds of technology markets from more than
100 countries around the globe. Using proprietary tools and research
processes, IDC’s Trackers are updated on a semiannual, quarterly, and
monthly basis. Tracker results are delivered to clients in user-friendly
excel deliverables and on-line query tools.

About IDCInternational Data Corporation (IDC) is the
premier global provider of market intelligence, advisory services, and
events for the information technology, telecommunications, and consumer
technology markets. With more than 1,100 analysts worldwide, IDC offers
global, regional, and local expertise on technology and industry
opportunities and trends in over 110 countries. IDC’s analysis and
insight helps IT professionals, business executives, and the investment
community to make fact-based technology decisions and to achieve their
key business objectives. Founded in 1964, IDC is a wholly-owned
subsidiary of International Data Group (IDG),
the world’s leading media, data and marketing services company that
activates and engages the most influential technology buyers. To learn
more about IDC, please visit www.idc.com.
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