According to a new forecast from IDC (www.idc.com), total spending on IT infrastructure products (server, enterprise storage, and Ethernet switches) for deployment in cloud environments is expected to total $46.5 billion in 2017 with year-over-year growth of 20.9%.

The research group says that public cloud data centers will account for the majority of this spending, 65.3%, growing at the fastest annual rate of 26.2%. Off-premises private cloud environments will represent 13% of cloud IT infrastructure spending, growing at 12.7% year over year. On-premises private clouds will account for 62.6% of spending on private cloud IT infrastructure and will grow 11.5% year over year in 2017.
Worldwide spending on traditional, non-cloud, IT infrastructure is expected to decline by 2.6% in 2017 but nevertheless will account for the majority, 57.2%, of total end user spending on IT infrastructure products across the three product segments, down from 62.4% in 2016. This represents a faster share loss than in the previous three years. The growing share of cloud environments in overall spending on IT infrastructure is common across all regions.

In cloud IT environments, spending in all three technology segments is forecast to grow by double-digits in 2017. Ethernet switches and compute platforms will be the fastest growing at 22.2% and 22.1%, respectively, while spending on storage platforms will grow 19.2%. Investments in all three technologies will increase across all cloud deployment models – public cloud, private cloud off-premises, and private cloud on-premises.

Long-term, IDC expects spending on off-premises cloud IT infrastructure will grow at a five-year compound annual growth rate (CAGR) of 12.0%, reaching $51.9 billion in 2021. Public cloud datacenters will account for 82.1% of this amount growing at a 12.1% CAGR while spending on off-premises private cloud infrastructure will increase at a CAGR of 11.7%.

Combined with on-premises private cloud, overall spending on cloud IT infrastructure will grow at an 11.7% CAGR and by 2020 will surpass spending on non-cloud IT infrastructure. Spending on on-premises private cloud IT infrastructure will grow at a 10.8% CAGR, while spending on non-cloud IT (on-premises and off-premises combined) will decline at a 2.7% CAGR during the same period.

"As adoption of public cloud services and private cloud deployments continue to spread around the world replacing traditional on-premises hardware-centric IT settings, overall market spending on servers, storage, and networking will follow this move," said Natalya Yezhkova, research director, Enterprise Storage. "The industry is getting closer to the point when cloud deployments will account for the majority of spending on IT infrastructure, which will be a major milestone embracing the benefits of service-centric IT."