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Server Spending Bolstered by Cloud Growth

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Among the biggest drivers of continued server growth in 2016 and beyond is the continued usage of servers as part of cloud infrastructure.

According to IDC’s latest Worldwide Quarterly Cloud IT Infrastructure Tracker, $38.2 billion in cloud infrastructure revenue is forecast for 2016, Worldwide Server Revenuesincluding the cost of server, storage, and Ethernet switches. The 2016 forecast represents an 18.9 percent gain over 2015.

The cloud spend is not however uniformly split between public and private cloud deployments. IDC forecasts public cloud IT infrastructure spend will hit $24.4 billion in 2016, for a 14.1 percent yearly gain. In contrast, private cloud will grow to $13.9 billion this year, for an 11.1 percent growth rate.

Within the cloud IT infrastructure spend, servers are forecast to grow by 12.4 percent this year, while storage revenue will grow by 11.3 percent. The networking part of that, specifically the Ethernet switches used to enable public and private clouds, represents the greatest growth in 2016, currently forecast by IDC at 26.8 percent.

Over the next five years, the compound annual growth rate (CAGR) for cloud IT infrastructure spend is expected to slow from the 2016 high. IDC is now forecasting that $57.8 billion will be spent on cloud in 2020, which is a 12.5 percent five-year CAGR.

By 2020, IDC is also now forecasting that cloud will represent nearly half (47.9 percent) of total IT infrastructure spend in the enterprise.

From a public/private cloud split in 2020, $20.3 billion is forecast for private cloud IT infrastructure spend, while $37.5 billion is the forecast for public cloud services.

Regardless of whether the IT infrastructure is used for public or private cloud, the growth rate is still faster than traditional IT enterprise infrastructure, which IDC is forecasting will have a four-percent revenue decline in 2016. The five-year CAGR for traditional non-cloud IT infrastructure is currently forecast at 1.3 percent.

Looking specifically at servers, in 2015 IDC reported that global server revenue came in at $55.1 billion, for an 8.0 percent gain over 2014.

Sean Michael Kerner is a senior editor at ServerWatch and Follow him on Twitter @TechJournalist.

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