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29 Jun 2017

Worldwide Cloud IT Infrastructure Revenues Grew 14.9% to $8 Billion in First Quarter of 2017, According to IDC

FRAMINGHAM, Mass., June 29, 2017 – 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 14.9% year over year in the first quarter of 2017 (1Q17), reaching $8 billion.

Cloud IT infrastructure sales as a share of overall worldwide IT spending climbed to 39% in 1Q17, a significant increase from 33.9% a year ago. Revenue from infrastructure sales to private cloud grew by 6.0% to $3.1 billion, and to public cloud by 21.7% to $4.8 billion. In comparison, revenue in the traditional (non-cloud) IT infrastructure segment decreased 8.0% year over year in the first quarter of the year. Private cloud infrastructure growth was led by Ethernet switch at 15.5% year-over-year growth, followed by storage (excluding double counting with servers) at 10.0% and server at 2.1%. Public cloud growth was led by storage, which after heavy declines in 1Q16 grew 49.5% year over year in 1Q17, followed by Ethernet switch at 22.7% and server at 8.7%. In traditional IT deployments, server declined the most (9.3% year over year), with Ethernet switch and storage declining 4.4% and 6.1%, respectively.

"After a weak performance during 2016, storage purchases for cloud IT environments had a strong rebound in the first quarter, driving the overall growth in this segment," said Natalya Yezhkova, research director for Enterprise Storage at IDC. "Overall, the first quarter set a strong beginning of the year for the cloud IT infrastructure market. With positive dynamics in purchasing activity by hyperscalers across all technology segments we expect a strong year ahead for the fastest growing public cloud segment. And as end users continue to embrace the benefits of private cloud infrastructures, spending in this segment will also expand."

From a regional perspective, vendor revenue from cloud IT infrastructure sales grew fastest in Canada at 59.1% year over year in 1Q17 off a small base (overall cloud IT infrastructure market in Canada was just under $100 million in 1Q17), followed by Asia/Pacific (excluding Japan) at 18.7%, Japan at 15.3%, the United States at 15.1%, Middle East & Africa at 13.2%, Western Europe at 8.9%, Latin America at 7.8%, and the Central and Eastern Europe at 7.2%.

Top 3 Vendor Group, Worldwide Cloud IT Infrastructure Vendor Revenue, Q1 2017 (Revenues are in Millions, Excludes double counting of storage and servers)

Vendor Group

1Q17 Revenue (US$M)

1Q17 Market Share

1Q16 Revenue (US$M)

1Q16 Market Share

1Q17/1Q16 Revenue Growth

1. Dell Inc*

$1,289

16.2%

$1,292

18.6%

-0.2%

1. HPE/New H3C Group* **

$1,118

14.0%

$1,223

17.7%

-8.6%

3. Cisco

$902

11.3%

$830

12.0%

8.7%

ODM Direct

$1,976

24.8%

$1,204

17.4%

64.1%

Others

$2,678

33.6%

$2,379

34.3%

12.6%

Total

$7,963

100%

$6,928

100%

14.9%

IDC's Worldwide Quarterly Cloud IT Infrastructure Tracker, June 2017

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.



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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 will break out vendors' revenue by the hardware technology market into public and private cloud environments for historical data and provide a five-year forecast by the technology market.

Taxonomy Notes:

IDC 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."

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

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About IDC

International 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. Follow IDC on Twitter at @IDC and LinkedIn.

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Kuba Stolarski
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