IDC Says Cloud Computing Infrastructure Spending To Grow 19% In 2016

Spending on cloud computing infrastructure is expected to soar over the next five years, according to the latest survey by IDC. In 2016, cloud spending is expected to grow 18.9%, hitting $38.2 billion. For the next five years through 2020, cloud spending is expected to increase at compound annual growth rate of 12.5% to reach $57.8 billion.

While overall cloud infrastructure spending is expected increase over the next couple of years, spending on public cloud is expected to increase more rapidly than spending on private cloud.

According to IDC, spending on legacy data center gears will continue to fade as more enterprises realize the benefits of shift their systems to the cloud. For that reason, cloud infrastructure spending is expected to go up by 18.9% in 2016 while spending on traditional data center is expected to drop by 4% in the same year. Nevertheless, legacy data centers will still account for the lion’s share (63.8%) of total IT infrastructure spending.

Cloud environments

IDC projects total spending on cloud environments to hit $38.2 billion in 2016, suggesting 18.9% growth over 2015 metrics. Spending on public cloud is expected to increase 14.1% to hit $24.4 billion. Private cloud spending on the other had is expected to grow slowly at 11.1% to $13.9 billion.

Growth for the next five years

By 2020, IDC estimates spending on cloud environments will hit $57.8 billion, suggesting CAGR of 12.5%. By the same year, spending on public clouds is expected to spike to $37.5 billion from $24.4 billion modeled for the current year. Private cloud spending is also expected to have risen to $20.3 billion from $13.9 billion estimated for the present year.

Although for most enterprises IT is not their core business, they are finding that they can operate more efficiently when they deploy IT across the organization.

Leading vendors

HPE and Dell are expected to continue dominating the server vendor market. They were the top server vendors in 2015. IDC also predicts that Dell will dethrone HPE as the leading cloud environments revenue earner after it completes the acquisition of EMC.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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