Cloud spend outpacing traditional IT, spurring security investments

According to a newly released report from IDC, the share of cloud IT infrastructure sales in the third quarter of 2016 has climbed to 39.2% of all IT infrastructure spending, up from 34.7% a year ago.

According to IDC:

  • Revenue from private cloud infrastructure sales grew 8.2% to $3.3 billion, and public cloud 8.0% to $5.1 billion.
  • In contrast, on-premises IT infrastructure decreased 10.8% in the same period.
  • In the on-premises segment, server declined 12.9%, with Ethernet switch and storage declining 1.6% and 8.6%.
  • Private cloud infrastructure growth was led by Ethernet switch at 60.8% year-over-year growth, then storage (9.0%) and server (3.2%).
  • When it comes to public cloud growth, networking, again with Ethernet switch, witnessed the largest growth, growing 46.2%. And both server and storage growth in public cloud were relatively weak.

In the year ahead, IDC sees the biggest loser (and I don’t see any reason to think otherwise) as on-premises non-cloud infrastructure.

IDC predicts that total spending on IT infrastructure for cloud in 2017 will grow 18.2%, increasing in dollar amount to $44.2 billion. Of this amount, the majority (61.2%) will be in public cloud data centers, while off-premises, private cloud environments will contribute 14.6% of spending.

With the increased adoption of private and hybrid cloud strategies, spending on IT infrastructure for on-premises private cloud deployments is expected to grow at 16.6%.

Interestingly, IDC expects spending for worldwide security-related hardware, software and services to grow 8.3% — almost exactly the same growth rate as both public and private cloud infrastructure. Total worldwide revenues for security-related hardware, software and services are anticipated to grow from $73.7 billion in 2016 to $101.6 billion in 2020.

According to IDC, four industries will account for 37% of worldwide security spend: Banking, discrete manufacturing, federal/central government and process manufacturing will be the biggest investors in this space for the five-year period. Healthcare, telecommunications, utilities, state/local government and securities and investment services are expected to grow 9% annually over the next five years.

By far, the largest investments will be in security-related services, IDC predicts.

The investment in cloud platforms will not only increase cloud security investments — companies have to secure the infrastructure after all — but we should also be seeing tremendous investment in securing the new processes such as DevOps, Continuous Integration and Continuous Deployment that enterprises put in place for cloud deployments.


Global security spending to exceed $100 billion by 2020

Cybersecurity as an economic driver

The 5 biggest cloud developments to watch in 2017


  1. Tim Coote says:

    IDC’s definition of private cloud in the report is, essentially, capital purchases of on-premises IT assets. Sounds to me like some CFO’s need a bit of help with what the IT dept. is doing as they may simply be reclassifying existing capex. There’s a risk for such enterprises that they’re simply not getting the benefits of pay-as-you-go that they think they are, which are likely to lead to some future budget shocks.

    Liked by 1 person


  1. […] Cloud spend outpacing traditional IT, spurring security investments […]


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: