IT infrastructure market set for difficult growth year, says IDC

After unprecedented growth in 2018, it’s back to reality for both cloud and non-cloud infrastructure markets, IDC says

Every quarter IT researcher IDC releases market reports on traditional data centres, private and public cloud deployments to gauge what portion of server, storage and networking hardware markets are being deployed in cloud environments.

According to IDC, while spending on cloud IT infrastructure remains a primary growth engine, spending on IT infrastructure all in all is on course for slower growth than in previous years.

Tracking worldwide infrastructure sales

For 2018 IDC says annual spend on public and private cloud IT infrastructure totaled $66.1 billion, 1.3 percent higher than forecast in the previous quarter.

IDC has also raised its 2019 forecast for total cloud IT spend to $70.1 billion, a 4.5 percent markup from Q3’s forecast, and predicts a year-over-year growth of 6 percent.

But last quarter, vendor revenues from infrastructure product sales for cloud environments continued to fall and were lower than revenues from sales into traditional IT environments.

Although cloud’s share of total global IT infrastructure revenue is up to 48.3 percent up from 42.4 percent a year ago, this still represents a drop of 8.5 percent from Q3.

Spending on all three technology segments in cloud IT environments is forecast to deliver slower growth in 2019 than in previous years. Ethernet switches will be the fastest growing at 23.8 percent, with storage platforms spend growing 9.1 percent.

“The unprecedented growth of the infrastructure systems market in 2018 was shared across both cloud and non-cloud segments,”

“As market participants prepare for a very difficult growth comparison in 2019, compounded by strong, cyclical, macroeconomic headwinds, cloud IT infrastructure will be the primary growth engine supporting overall market performance until the next cyclical refresh,” said Kuba Stolarski, research director, infrastructure systems, platforms and technologies at IDC.

“With new on-premises public cloud stacks entering the picture, there is a distinct possibility of a significant surge in private cloud deployments over the next five years.”

Long-term, IDC expects spending on cloud IT infrastructure to grow at a five-year compound annual growth rate (CAGR) of 10.9 percent, reaching $99.9 billion in 2023 and accounting for 59.5 percent of total IT infrastructure spend.

Out of the top four vendors, Inspur and Huawei enjoyed the largest jump in revenue (88.4 percent and 63.9 percent, respectively. Cisco and HPE fared worst, recording 11.6 percent and 31.4 percent growth, respectively.