Cloud spending, including sales through channel, expected to increase 37 percent in 2018, according to IDC
Sales of equipment used in public and private cloud infrastructure increased 47 percent in the third quarter of 2018, topping the sales of traditional data center equipment for the first time, according to market analyst firm IDC. Cloud infrastructure sales could top $65
The Lowdown: Spending on cloud infrastructure continues to increase unabated. Investments in public and private cloud equipment more than doubled over the past two years. IDC expects cloud infrastructure investments to increase at a compound annual growth rate (CAGR) of 13.3 percent for the next five years. By 2022, IDC expects cloud infrastructure spending to top $88.6 billion annually.
The Details: In the third quarter (July to September) of 2018, worldwide spending on cloud infrastructure accounted for 50.9 percent of all infrastructure dollars. IDC expects full-year 2018 spending on public cloud infrastructure to increase by 44.7 percent, while public cloud will increase by 23.3 percent.
The Impact: While sales of traditional IT infrastructure equipment is slowing, sales of servers and other equipment for conventional data centers continue to grow at a clip of 12.3 percent year over year. Despite the double-digit increases, IDC expects traditional IT infrastructure to continue to lose share of wallet to cloud infrastructure. By 2022, traditional IT infrastructure will represent 42.4 percent of spending, the analyst firm reported.
Background: The top cloud infrastructure equipment vendors by percentage of market share are:
1. Dell (USA): 14.2%
2. Hewlett-Packard Enterprise (USA): 9.8%
3. Cisco (USA): 6.4%
4. Inspur (China): 6.3%
5. Lenovo (China): 4.8%
The Buzz: “After such a strong year, we expect some slowdown in 2019 as the overall market cools down and some cloud providers work through adjustments in their supply chain,” said Natalya Yezhkova, research director of IT Infrastructure and Platforms at IDC. “However, IDC expects the shift in IT infrastructure spending toward cloud environments will continue.”
Channelnomics Point of View: The healthy growth in cloud infrastructure equipment is good for hardware vendors and channel partners that continue to see ways to augment their revenue away from traditional products. However, the true value to channel partners in cloud infrastructure is likely professional services. Vendors will continue to expand their infrastructure sales, but customers will see the professional services and support of channel partners.