Friday, 21 June 2019 11:28

Cloud hardware revenue up, but spending slows: IDC

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Cloud hardware revenue up, but spending slows: IDC Pixabay

Vendor revenue from sales of IT infrastructure products — servers, enterprise storage and Ethernet switches — for cloud environments, both private and public, increased by 11.4% year-on-year for the first quarter of 2019, the analyst firm IDC says.

Total revenue for the period was US$14.5 billion, the company said, adding that it had lowered its forecasts for cloud IT infrastructure for the year to US$66.9 billion, a drop of 4.5% from the forecast made in the previous quarter.

Year-over-year growth would also slow to 1.6%, IDC said.

Vendor revenue from sales of hardware infrastructure to public cloud environments for the quarter was down 13.4% compared to the previous quarter, but up 8.9% year-on-year to US$9.8 billion.

IDC said after a strong showing in 2018, it expected the public cloud IT infrastructure segment to cool down in 2019 with vendor revenue dropping to US$44.5 billion, a 2.2% decrease from 2018.

idc cloud chart

"Although it will continue to account for the majority of spending on cloud IT environments, its share will decrease from 69.1% in 2018 to 66.5% in 2019," it said.

"In contrast, spending on private cloud IT infrastructure has showed more stable growth since IDC started tracking sales of IT infrastructure products in various deployment environments. In the first quarter of 2019, vendor revenues from private cloud environments increased 16.9% year-over-year reaching US$4.7 billion."

It said spending in this segment was expected to grow 10.1% year-over-year in 2019.

"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, 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."

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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