Cloud Computing Market to Hit $41.7B in 2017

By Michael Guta, Contributing Writer  |  April 27, 2017

In 2016, International Data Corp (IDC (News - Alert)) forecasted network upgrades to address the challenges of bottleneck in cloud data centers, as that was responsible for the single-digit growth in cloud computing. At the time, the firm also said network upgrades focusing in public cloud deployments and the continuation of hyper-scale data center build-outs that had been delayed will be built with new generation hardware using Intel (News - Alert)'s Skylake architecture and other technologies, thus increasing that single digit growth in 2017. And the new forecast IDC just published in its “Worldwide Quarterly Cloud IT Infrastructure Tracker” revealed as much, with the market experiencing a 15.3 percent increase with a total market value of $41.7 billion for 2017.

According to IDC, the 15 plus percent growth is driven by spending in servers, enterprise storage and Ethernet switches that is mostly being invested in public cloud data centers. The public cloud segment accounts for 60.5 percent of the projected spend, with off-premises private cloud spending at 14.9 percent, and the remainder 13.1 percent going to on-premises private clouds.

Natalya Yezhkova, research director for storage systems at IDC, explained the growth this way: “Growing demand for access to agile IT resources and proliferation of next generation workloads will continue driving adoption of cloud-based services. In turn, this move leads to a shift in IT infrastructure spending from traditional enterprise on-premises deployments to datacenters delivering cloud services and corporate private clouds.”

As for the future, IDC is projecting a compound annual growth rate of 11.7 percent for the next five years, reaching a market value of $47.2 billion by the end of the forecast period in 2021. And public cloud data centers will account for 80.4 percent of that amount as more organizations increase their investment in cloud IT infrastructure across all regions while reducing their spending on non-cloud deployments.

The growth of cloud computing is being driven because of the convergence of several different technologies maturing at the same time. This includes wireless broadband, smart mobile devices, software defined networking/network functions virtualization (SDN/NFV), hyper-scale data centers and multi-gigabit Ethernet, to name a few. Together, these technologies are making it possible for consumers and organizations to access cloud computing services for software, communications, infrastructure, platforms, security and more.

In the business world, cloud computing is providing low total cost of ownership of enterprise grade solutions for organizations of all sizes by reducing the complexity of the adoption and deployment of information and communications technologies. Additionally, cloud computing is delivering on the collaborative evolution taking place in today's workforce. These and other factors are some of the drivers that have led IDC to be bullish on the growth of cloud computing moving forward. 

Edited by Alicia Young