Vendor revenue from sales of infrastructure products (server, storage, and Ethernet switch) for cloud IT, including public and private cloud, grew 45.5% year over year in the first quarter of 2018 (1Q18), reaching $12.9 billion. IDC also raised its forecast for total spending on cloud IT infrastructure in 2018 to $57.2 billion with year-over-year growth of 21.3%.
Public cloud infrastructure quarterly revenue has more than doubled in the past three years to $9.0 billion in 1Q18, growing 55.8% year over year. Private cloud revenue reached $3.9 billion for an annual increase of 26.5%.
The combined public and private cloud revenues now represent 46.1% of the total worldwide IT infrastructure spending, up from 41.8% a year ago. Traditional (non-cloud) IT infrastructure revenue grew 22.0% from a year ago, although it has been generally declining over the past several years; at $15.1 billion in 1Q18 it still represents 53.9% of total worldwide IT infrastructure spending.
“Hyperscaler datacenter expansion and refresh continued to drive overall cloud IT infrastructure growth in the first quarter,” said Kuba Stolarski, research director for Infrastructure Platforms and Technologies at IDC. “While all infrastructure segments continued their strong growth, public cloud has been growing the most. IDC expects this trend to continue through the end of 2018. Digital transformation initiatives such as edge computing and machine learning have been bringing new enterprise workloads into the cloud, driving up the demand for higher density configurations of cores, memory, and storage. As systems technology continues to evolve towards pooled resources and composable infrastructure, the emergence of these next-generation workloads will drive net new growth beyond traditional enterprise workloads.”
All regions grew their cloud IT Infrastructure revenue by double digits in 1Q18. Asia/Pacific (excluding Japan) grew revenue the fastest, by 74.7% year over year. Next were USA (43.6%), Middle East & Africa (MEA) (42.3%), Central and Eastern Europe (CEE) (39.2%), Latin America (37.7%), Canada (29.4%), Western Europe (26.1%), and Japan (15.0%).
IDC’s cloud IT infrastructure forecast measures total spend (vendor recognized revenue plus channel revenue). Of the $57.2 billion in cloud IT infrastructure spend forecast for 2018, public cloud will account for 67.0% of the total, growing at an annual rate of 23.6%. Private cloud will grow at 16.7% year over year.
Worldwide spending on traditional non-cloud IT infrastructure is expected to grow by 4.2% in 2018 as enterprises continue to refresh their infrastructure. Traditional IT infrastructure will account for 54.0% of total end user spending on IT infrastructure products, down from 57.8% in 2017. This represents a decelerating share loss as compared to the previous four years. The growing share of cloud environments in overall spending on IT infrastructure is common across all regions.
Long-term, IDC expects spending on cloud IT infrastructure to grow at a five-year compound annual growth rate (CAGR) of 10.5%, reaching $77.7 billion in 2022, and accounting for 55.4% of total IT infrastructure spend. Public cloud datacenters will account for 64.7% of this amount, growing at a 10.2% CAGR. Spending on private cloud infrastructure will grow at a CAGR of 11.1%.