Revenue from cloud IT infrastructure products falls

Vendor revenue from sales of IT infrastructure products for cloud environments fell in the third quarter of 2019 (3Q19).

Cloud IT infrastructure products, including server, enterprise storage, and Ethernet switches sales fall to 1.8%, for the second consecutive quarter during the three months ending September 2019, according to the International Data Corporation’s (IDC). Spending cloud IT environments reached US$16.8 billion.

Spending on cloud IT infrastructure will stay below 50%

Notably, public cloud spending fell more when compared to the private cloud. Public cloud spending fell 3.7% year over year to US$11.9 billion. Despite this slowdown, it is estimated that the public cloud will continue to account for most of the spending on cloud IT environments. At the side of the private cloud, although demand for the private cloud is augmenting, the share of public cloud IT infrastructure continued to fall in 2019.

In the third quarter of 2019, cloud environments accounted for 53.4% of vendor revenues. When we look at total revenue in 2019, cloud spending is expected to stay just below 50%. For 2020, it is estimated that spending on cloud IT infrastructure will stay in the 50+% range.

Across the three IT infrastructure domains, only Ethernet switches segment is expected to grow year-over-year in 2019, up 11.2%, while spending on computing platforms will fall 3.1% and spending on storage will grow just 0.8%. Compute, with spending at $34.1 billion will be the largest category of cloud IT infrastructure spending in 2020 like it was in 2019.

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