Worldwide spend on cloud IT infrastructure hits double-digit growth in Q2—report

According to a report by IDC, quarterly spending on public cloud IT infrastructure has more than doubled over the past three years. (IDC)

Driven by use of multiple clouds by businesses, vendor revenue from the sales of cloud IT infrastructure increased by more than 48% year over year in the latest second quarter, according to a report.

Total vendor revenue from sales of infrastructure products, which includes servers, enterprise storage and Ethernet switches, for cloud IT—including public and private clouds—totaled $15.4 billion in the second quarter, according to a report by IDC.

Growing 60% year over year, quarterly spending on public cloud infrastructure has more than doubled over the past three years to $10.9 billion in the second quarter. By the end of this year, public cloud will account for 68% of the expected annual cloud IT infrastructure spending, with an annual growth rate of 40%.

For private cloud infrastructure, spending reached $4.6 billion in the second quarter for an annual increase of 28%. IDC estimates that for the full year, private cloud will represent 15% of total IT infrastructure spending, growing 20.3% year over year.

IDC upped its forecast for total spending, which included vendor-recognized revenue plus channel revenue, on cloud IT infrastructure in 2018 to $62.2 billion with year-over-year growth of 31%.

Overall, the combined public and private cloud revenues accounted for 48% of the total worldwide IT infrastructure spending in the second quarter, up from 43% a year ago, according to IDC.

The marked revenue increases across cloud vendors are being driven by businesses that are deploying more software-as-a-service offerings as they transition from being hardware-based to software-based. Infrastructure-as-a-service is in an early growth phase as more of those workloads are being moved to cloud environments.

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Spending in all technology sectors in cloud IT environments is forecast to grow by double digits in 2018. Compute platforms will be the fastest growing sector at 47%, while spending on Ethernet switches and storage platforms will grow 18% and 19.2%, respectively, year over year in 2018. Investments in all three of those areas will increase across all cloud deployment models: public cloud, private cloud off-premises, and private cloud on-premises.

"As share of cloud environments in the overall spending on IT infrastructure continues to climb and approaches 50%, it is evident that cloud, which once used to be an emerging sector of the IT infrastructure industry, is now the norm. One of the tasks for enterprises now is not only to decide on what cloud resources to use but, actually, how to manage multiple cloud resources," said Natalya Yezhkova, research director for IDC's IT infrastructure and platforms, in a prepared statement. "End users' ability to utilize multi-cloud resources is an important driver of further proliferation for both public and private cloud environments."

All of the regions grew their cloud IT infrastructure revenue by double digits in the second quarter. Asia-Pacific—minus Japan—grew revenue the fastest, by 78% year over year. In the Asia-Pacific region, China's cloud IT revenue almost doubled year over year, growing at 96%, while the rest of the region grew 50%. Other regions that were among the fastest growing in the second quarter included Latin America (47%), U.S. (50%) and Japan (36%). 

Among the vendors, Dell was the leader in second-quarter market share with 15.5%, followed by HPE/H3C Group (10.8), Cisco (6.6%), Lenovo (5.3%) and Inspur (4.5%.)