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Cloud IT Infrastructure Spend Rises 9.2%

April 11, 2017

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 9.2% year over year to $32.6 billion in 2016, with vendor revenue for the fourth quarter (4Q16) growing at 7.3% to $9.2 billion.

Cloud IT infrastructure sales as a share of overall worldwide IT spending climbed to 37.2% in 4Q16, up from 33.4% a year ago. Revenue from infrastructure sales to private cloud grew by 10.2% to $3.8 billion, and to public cloud by 5.3% to $5.4 billion. In comparison, revenue in the traditional (non-cloud) IT infrastructure segment decreased 9.0% year over year in the fourth quarter. Private cloud infrastructure growth was led by Ethernet switch at 52.7% year-over-year growth, followed by server at 9.3%, and storage at 3.6%. Public cloud growth was also led by Ethernet switch at 30.0% year-over-year growth, followed by server at 2.4% and a 2.1% decline in storage. In traditional IT deployments, storage declined the most (10.8% year over year), with Ethernet switch and server declining 3.4% and 9.0%, respectively.

"Growth slowed to single digits in 2016 in the cloud IT infrastructure market as hyperscale cloud datacenter growth continued its pause," said Kuba Stolarski, research director for Computing Platforms at IDC. "Network upgrades continue to be the focus of public cloud deployments, as network bandwidth has become by far the largest bottleneck in cloud datacenters. After some delays for a few hyperscalers, datacenter buildouts and refresh are expected to accelerate throughout 2017, built on newer generation hardware, primarily using Intel's Skylake architecture."

From a regional perspective, vendor revenue from cloud IT infrastructure sales grew fastest in Japan at 42.3% year over year in 4Q16, followed by Middle East & Africa at 33.6%, Canada at 16.6%, Western Europe at 15.6%, Asia/Pacific (excluding Japan) at 14.5%, Central and Eastern Europe at 11.6%, Latin America at 9.9%, and the United States at 0.1%.
 
Top 5 Vendor Group, Worldwide Cloud IT Infrastructure Vendor Revenue, Q4 2016

(Revenues are in Millions, Excludes double counting of storage and servers)
Vendor Group 4Q16 Revenue (US$M) 4Q16 Market Share 4Q15 Revenue (US$M) 4Q15 Market Share 4Q16/4Q15 Revenue Growth
1. Dell Technologies $1,587 17.3% $1,645 19.2% -3.5%
2. HPE/New H3C Group** $1,340 14.6% $1,381 16.2% -3.0%
3. Cisco $1,032 11.3% $838 9.8% 23.1%
4. Huawei $416 4.5% $258 3.0% 61.4%
5. IBM* $346 3.8% $357 4.2% -3.0%
5. Lenovo* $295 3.2% $275 3.2% 7.3%
5. NetApp* $267 2.9% $257 3.0% 3.9%
ODM Direct $1,877 20.5% $1,926 22.5% -2.6%
Others $2,014 28.1% $1,613 25.1% 24.9%
Total $9,173 100% $8,549 100% 7.3%
IDC's Worldwide Quarterly Cloud IT Infrastructure Tracker, April 2017

Notes:

* IDC declares a statistical tie in the worldwide cloud IT infrastructure market when there is a difference of one percent or less in the vendor revenue shares among two or more vendors.

** Due to the existing joint venture between HPE and the New H3C Group, IDC will be reporting external market share on a global level for HPE as "HPE/New H3C Group" starting from Q2 2016 and going forward.

 
Top 5 Vendor Group, Worldwide Cloud IT Infrastructure Vendor Revenue, 2016

(Revenues are in Millions, Excludes double counting of storage and servers)
Vendor Group 2016 Revenue (US$M) 2016 Market Share 2015 Revenue (US$M) 2015 Market Share 2016/2015 Revenue Growth
1. Dell Technologies $5,747 17.6% $5,391 18.1% 6.6%
2. HPE/New H3C Group** $5,311 16.3% $4,768 16.0% 11.4%
3. Cisco $3,783 11.6% $2,906 9.7% 30.2%
4. Huawei* $1,205 3.7% $743 2.5% 62.3%
4. Lenovo* $1,097 3.4% $990 3.3% 10.8%
4. IBM* $1,017 3.1% $1,257 4.2% -19.1%
4. NetApp* $1,007 3.1% $1,036 3.5% -2.8%
ODM Direct $6,733 20.7% $7,427 24.9% -9.3%
Others $6,694 20.5% $5,327 17.8% 25.7%
Total $32,594 100% $29,845 100% 9.2%
IDC's Worldwide Quarterly Cloud IT Infrastructure Tracker, April 2017

IDC's Worldwide Quarterly Cloud IT Infrastructure Tracker, April 2017

Notes:

* IDC declares a statistical tie in the worldwide cloud IT infrastructure market when there is a difference of one percent or less in the vendor revenue shares among two or more vendors.

** Due to the existing joint venture between HPE and the New H3C Group, IDC will be reporting external market share on a global level for HPE as "HPE/New H3C Group" starting from Q2 2016 and going forward.

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