Cloud spending surpasses traditional infrastructure expenditure for the first time

IDC thinks cloud-related IT spending will start to slow over the next year though

Cloud Growth

IDC has revealed that cloud infrastructure has generated more revenue for tech businesses compared to traditional IT infrastructure for the first time ever.

During the third quarter of 2018, cloud infrastructure components, such as servers, enterprise storage, and Ethernet switches grew by 47.2%, with the research firm estimating this will result in 37.2% growth for the entirety of 2018.

Cloud-related revenues accounted for 50.9% of the total worldwide IT infrastructure vendor revenues, up more than 7% year-on-year.

"The first three quarters of 2018 were exceptional for the IT Infrastructure market across all deployment environments and the increase in IT infrastructure investments by public cloud datacenters was especially strong driven by the opening of new datacentres and infrastructure refresh in existing datacentres," said Natalya Yezhkova, research director, IT Infrastructure and Platforms.

However, the company has predicted this growth will start to slow in the next 12 months as cloud vendors make some changes to their operational structure, specifically in supply chain.

"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. However, IDC expects the shift in IT infrastructure spending toward cloud environments will continue."

Dell continued to dominate the market, with 50.7% revenue growth in Q3 2018 compared to the same quarter of 2017, although Lenovo's revenue growth was perhaps the most impressive - its cloud-related revenues grew by 182%, increasing its market share from 2.5% in Q3 2017 to 4.8% in Q3 2018. Little-known vendor Inspur also made great strides, with growth of 179.4% year-on-year and taking 6.3% of the market share.

By 2022, IDC expects traditional IT infrastructure spending to decrease to 42.4% of the total worldwide IT infrastructure spend as more businesses move away from traditional architecture to embrace the cloud.

Featured Resources

Security analytics for your multi-cloud deployments

IBM Security QRadar SIEM solution brief

Download now

Five reasons to move to the cloud

Join the enterprises moving their workloads to the cloud

Download now

Architecting hybrid IT and edge for digital advantage

Why business leaders should consider a hybrid IT strategy

Download now

Six reasons to accelerate remote asset monitoring with AI

How to optimise resources, increase productivity, and grow profit margins with AI

Download now

Recommended

The care and feeding of cloud
Whitepaper

The care and feeding of cloud

24 Feb 2021
Address multi-cloud configuration risks
Whitepaper

Address multi-cloud configuration risks

24 Feb 2021
Atlassian’s new cloud offering addresses enterprises’ core needs
cloud management

Atlassian’s new cloud offering addresses enterprises’ core needs

18 Feb 2021
How to scale your organisation in the cloud
Whitepaper

How to scale your organisation in the cloud

17 Feb 2021

Most Popular

Mysterious Silver Sparrow malware hits 30,000 macOS devices
malware

Mysterious Silver Sparrow malware hits 30,000 macOS devices

22 Feb 2021
IBM reportedly mulls sale of Watson Health business
mergers and acquisitions

IBM reportedly mulls sale of Watson Health business

22 Feb 2021
Microsoft to launch standalone Office 2021 suite
Microsoft Office

Microsoft to launch standalone Office 2021 suite

19 Feb 2021