Market analyst firm lowers 2019 forecast for IT infrastructure spending, but expects a rebound
The cloud IT infrastructure market is slowing, according to new quarterly tracking data by market analyst firm IDC. While the overall market continues to expand at double-digit rates, the overall rate of growth is diminishing as demand for networking gear among public and private cloud providers decreases.
The Lowdown: According to IDC, sales of IT infrastructure – including servers, enterprise storage, and Ethernet switches – into public and private cloud environments expanded 11.4% in the first three months of 2019. While a healthy and faster-than-market growth rate, it’s less than the 13.4% rate from the same period in 2018.
Cloud spending in the first quarter was a robust $14.5 billion. However, IDC sees demand slowing, which is causing it to lower its overall IT cloud infrastructure rate forecast from 4.5% to 1.6%. In total, IDC believes cloud IT infrastructure spending will top $66.9 billion for 2019.
The Details: IDC says IT infrastructure spending is in flux. In 2018, cloud IT infrastructure eclipsed on-premises and traditional infrastructure for 50% of the overall spending. However, IDC says cloud infrastructure has since receded to less than 50%. Private cloud infrastructure remains somewhat more robust than that of public cloud. Traditional infrastructure spending remains relatively flat. The expectation is traditional IT spending will represent only 42% of the total by 2023, with the balance favoring public and private cloud.
The Buzz: “As the overall IT infrastructure goes through a period of slowdown after an outstanding 2018, the important trends might look somewhat distorted in the short term,” said Natalya Yezhkova, research vice president of Infrastructure Systems, Platforms, and Technologies at IDC. “IDC’s long-term expectations strongly back continuous growth of cloud IT infrastructure environments. With vendors and service providers finding new ways of delivering cloud services, including from IT infrastructure deployed at customer premises, end users have fewer obstacles and pain points in adopting cloud/services-based IT.”