Worldwide Cloud IT Infrastructure Revenue Grows 3.9% to $6.6 Billion on Slowed Demand from Public Cloud in First Quarter of 2016, According to IDC

FRAMINGHAM, Mass–(BUSINESS WIRE)–#IDCTracker–According to the International Data Corporation (IDC)
Worldwide
Quarterly Cloud IT Infrastructure Tracker
, vendor revenue from sales
of infrastructure products (server, storage, and Ethernet switch) for
cloud IT, including public and private cloud, grew by 3.9% year over
year to $6.6 billion in the first quarter of 2016 (1Q16) on slowed
demand from the hyperscale public cloud sector.

Total cloud IT infrastructure revenues climbed to a 32.3% share of
overall IT revenues in 1Q16, up from 30.2% a year ago. Revenue from
infrastructure sales to private cloud grew by 6.8% to $2.8 billion, and
to public cloud by 1.9% to $3.9 billion. In comparison, revenue in the
traditional (non-cloud) IT infrastructure segment decreased by 6.0% year
over year in the first quarter, with declines in both storage and
servers, and growth in Ethernet switch. Ethernet switch also showed
strong year-on-year growth in both private and public cloud, 53.7% and
69.4%, respectively. Storage grew 11.5% year over year in private cloud,
but declined 29.6% in public cloud. Conversely, server declined 1.1% in
private cloud and grew 8.7% in public cloud.

“A slowdown in hyperscale public cloud infrastructure deployment demand
negatively impacted growth in both public cloud and cloud IT overall,”
said Kuba
Stolarski
, research director for Computing Platforms at IDC.
“Private cloud deployment growth also slowed, as 2016 began with
difficult comparisons to 1Q15, when server and storage refresh drove a
high level of spend and high growth. As the system refresh has mostly
ended, this will continue to push private cloud and, more generally,
enterprise IT growth downwards in the near term. Hyperscale demand
should return to higher deployment levels later this year, bolstered by
service providers who have announced new datacenter builds expected to
go online this year. As the market continues to work through this short
term adjustment period, with geopolitical wild cards such as Brexit
looming, end-customers’ decisions about where and how to deploy IT
resources may be impacted. If new data sovereignty concerns arise,
service providers will experience added pressure to increase local
datacenter presence, or face potential loss of certain customers’
workloads.”

From a regional perspective, vendor revenue from cloud IT infrastructure
sales grew fastest in the Middle East and Africa (MEA) at 25.9% year
over year in 1Q16, followed by Western Europe at 20.6%, Asia/Pacific
(excluding Japan) at 18.5%, Japan at 17.7%, and Canada at 9.5%. Latin
America declined 21.2% year over year, while the United States declined
4.1% and Central & Eastern Europe fell just 0.1%.

 

Top 5 Corporate Family, Worldwide Cloud IT Infrastructure
Vendor Revenue, Q1 2016

(Revenues are in Millions,
Excludes double counting of storage and servers)

Vendor    

1Q16
Revenue
(US$M)

   

1Q16 Market
Share

   

1Q15
Revenue
(US$M)

   

1Q15 Market
Share

   

1Q16/1Q15
Revenue
Growth

1. Hewlett Packard Enterprise     $1,137     17.2%     $949     14.9%     19.8%
2. Cisco*     $786     11.9%     $604     9.5%     30.1%
2. Dell*     $782     11.8%     $726     11.4%     7.6%
4. EMC     $468     7.1%     $422     6.6%     10.9%
5. NetApp*     $245     3.7%     $271     4.2%     -9.5%
5. IBM*     $210     3.2%     $301     4.7%     -30.3%
5. Lenovo*     $206     3.1%     $208     3.3%     -1.2%
ODM Direct     $1,208     18.2%     $1,696     26.6%     -28.8%
Others     $1,585     23.9%     $1,199     18.8%     32.2%
Total     $6,626     100%     $6,377     100%     3.9%
IDC’s Worldwide Quarterly Cloud IT Infrastructure Tracker, June 30,
2016
 

Notes:

* Cisco and Dell finished 1Q16 in a statistical tie for the number 2
position, while NetApp, IBM, and Lenovo similarly tied for the number 5
position in 1Q16. IDC declares a statistical tie in the worldwide cloud
IT infrastructure market when there is less than one percent difference
in the revenue share of two or more vendors.

In addition to the table above, an interactive graphic showing worldwide
market share for the top 5 cloud IT infrastructure vendors in 1Q15 and
1Q16 is available here.
The chart is intended for public use in online news articles and social
media. Instructions on how to embed this graphic can be found by viewing this
press release on IDC.com
.

IDC’s Worldwide
Quarterly Cloud IT Infrastructure Tracker
is designed to provide
clients with a better understanding of what portion of the server, disk
storage systems, and networking hardware markets are being deployed in
cloud environments. This tracker will break out vendors’ revenue by the
hardware technology market into public and private cloud environments
for historical data and also provide a five-year forecast by the
technology market.

Taxonomy Notes:
IDC defines cloud services more formally
through a checklist of key attributes that an offering must manifest to
end users of the service. Public cloud services are shared among
unrelated enterprises and consumers; open to a largely unrestricted
universe of potential users; and designed for a market, not a single
enterprise. The public cloud market includes variety of services
designed to extend or, in some cases, replace IT infrastructure deployed
in corporate datacenters. It also includes content services delivered by
a group of suppliers IDC calls Value Added Content Providers (VACP).
Private cloud services are shared within a single enterprise or an
extended enterprise with restrictions on access and level of resource
dedication and defined/controlled by the enterprise (and beyond the
control available in public cloud offerings); can be onsite or offsite;
and can be managed by a third-party or in-house staff. In private cloud
that is managed by in-house staff, “vendors (cloud service providers)”
are equivalent to the IT departments/shared service departments within
enterprises/groups. In this utilization model, where standardized
services are jointly used within the enterprise/group, business
departments, offices, and employees are the “service users.”

For more information about IDC’s Worldwide Quarterly Cloud IT
Infrastructure Tracker, please contact Lidice Fernandez at 305-351-3057
or lfernandez@idc.com.

About IDC Trackers
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Contacts

IDC
Lidice Fernandez, 305-351-3057
lfernandez@idc.com
or
Kuba
Stolarski, 508-935-4172
kstolarski@idc.com
or
Michael
Shirer, 508-935-4200
press@idc.com