IDC: Revenue growth in public cloud IT infrastructure remains strong
According to International Data Corporation's (IDC) global quarterly cloud IT infrastructure tracker, vendor revenue from sales of IT infrastructure products (servers, enterprise storage, and Ethernet switch) for cloud environments, including public and private Cloud, down 34.4% year-on-year in Q220 (2Q20). Investments in traditional non-cloud IT infrastructure decreased by 8.7% year-on-year in Q220.
These growth rates demonstrate the market's response to major adjustments in business, education, and social activities caused by the COVID-19 pandemic, and the role that IT infrastructure plays in these adjustments. Globally, there have been massive shifts to online tools in all areas of human life, including collaboration, virtual business events, entertainment, shopping, telemedicine, and education. Cloud environments, and the public cloud in particular, have been a key driver of this shift. Spending on public cloud IT infrastructure increased by 47.8% in Q220 from a year earlier, reaching $14.1 billion and surpassing spending on non-cloud IT infrastructure for the first time. Spending on private cloud infrastructure increased by 7% year-on-year to $5 billion in Q220, with 64.1% of this amount attributable to local private Clouds accounted for
IDC believes that the hardware infrastructure market has reached the tipping point and cloud environments will continue to account for an ever-increasing share of total spending. While IDC increased its forecast for cloud and non-cloud IT spending for the full year 2020, cloud IT infrastructure investment is expected to exceed non-cloud infrastructure spending by 54.8% to 45.2%. Most of the spending increase will come from public cloud IT infrastructure, which is expected to slow in H220 but increase by 16% year over year to $52.4B for the full year. Private cloud infrastructure spending will also be weak in the second half of the year, reaching $21.5 billion for the full year, an increase of only 0.3% year-over-year.
The turnaround
As of 2019, the dominance of cloud IT environments over non-cloud environments already existed for compute platforms and Ethernet switches, while the majority of newly shipped storage platforms were still in non-cloud environments. From 2020 onward, this shift will persist with increasing investments by public cloud providers in storage platforms in all three technology domains. In cloud deployment environments, compute platforms will remain the largest segment (50.7%) of spending in 2020, while storage platforms will be the fastest growing segment, with spending increasing by 21.2% to $27.8 billion, and the Ethernet switch segment will grow by 3.9% year over year to $8.5 billion.
Cloud IT infrastructure spending grew in all regions in Q220, with the two largest regions, China and the U.S., achieving the highest annual growth rates of 60.5% and 36.9%, respectively. Public cloud infrastructure growth outpaced private cloud IT growth in all regions except Central and Eastern Europe and the Middle East and Africa.
At vendor level, results were mixed. Inspur more than doubled its revenue from sales in cloud environments, securing second place in the vendor rankings *, while the original design manufacturer (ODM Direct) group grew 63.6% year-on-year. Lenovo's revenue exceeded $1 billion, growing 49.3% year-over-year.
