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Revenues for public cloud IT infrastructure to cool down in 2019: IDC

cloud IT infrastructure

The sales revenues for IT infrastructure products for cloud experienced a decline of 10.2% in the second quarter of 2019, compared to the same quarter last year.

This is the finding of IDC’s Worldwide Quarterly Cloud IT Infrastructure Tracker. As per IDC, these revenues have now reached $14.1 billion. The IT infrastructure products include server, enterprise storage, and Ethernet switch for both public and private cloud.

Along with the revenues, IDC also reported a decline in total spending on cloud IT infrastructure this year. It is down 4.9% from last quarter to $63.6 billion.

The sales for hardware infrastructure segment have declined 0.9% from the last quarter, and 15.1% year over year to $9.4 billion.

“This segment of the market continues to be highly impacted by demand from a handful of hyperscale service providers, whose spending on IT infrastructure tends to have visible up and down swings,” reported IDC.

Specifically, the IT infrastructure for the public cloud segment is expected to calm down this year by 6.7% to $42 billion. Whereas, IT infrastructure for private cloud is witnessing stable growth, rising 1.5% YoY to reach $4.6 billion.

“Overall, the IT infrastructure industry is at crossing point in terms of product sales to cloud vs. traditional IT environments,” added IDC.

In the third quarter of 2018, it was the first time that revenues from cloud IT environments surpassed the 50% mark. However, it has been felling down the tipping point since then. In 2Q19, the cloud IT environments accounted for 48.4% of vendor revenues.

Also read: Fifty one percent customers switch service providers if their trust is compromised: Microsoft-IDC study

IDC forecasts that the cloud IT infrastructure spending will stay below 50% for the entire 2019. In the long-term, it will grow rapidly and cross the level of spending on traditional IT infrastructure in 2020.

By regions, Middle East & Africa (29.3%) experienced the fastest growth in their cloud IT infrastructure revenues. Canada’s revenues grew by 15.6%, followed by Central & Eastern Europe (6.5%), Japan (5.9%), and Western Europe (3.1%).

In APAC, the cloud IT infrastructure revenues declined slightly by 7.7% YoY. Latin America, China, and the USA also experienced a decline of 14.2%, 6.9% and 16.3%.

Related reading: IoT devices will generate 80 zettabytes of data in 2025: IDC

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