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Cloud hardware spend edges ahead of traditional setups for the first time • The Register


Abacus-strummer IDC has clocked that quarterly revenues of IT infrastructure (that’s servers, storage, and Ethernet switches) for the cloud have officially squeezed past sales into traditional environments.

In a report this week, based on its quarterly cloud IT infrastructure tracker, the analyst said cloud sales had overtaken traditional environment in the third quarter of 2018.

During that period, vendor revenues from sales of IT infrastructure into cloud environments edged out sales into traditional environments, reaching 50.9 per cent of total worldwide IT infrastructure vendor revenues, up from 43.6 per cent the year before.

However, for the full 2018, the company said spending on cloud infra would remain below the 50 per cent mark at 47.4 per cent – although IDC director for IT infrastructure and platforms Natalya Yeshkova said the inexorable shift towards cloud spend would continue.

Quarterly spending on public cloud IT kit reached $12.1bn in the third quarter of 2018, growing 56.1 per cent year-on-year. Meanwhile, private cloud grew at about half this rate, 28.3 per cent, to $4.7bn.

Within cloud IT environments, compute platforms will grow the fastest for the full year, at a rate of 59.1 per cent, followed by storage platforms (20.4 per cent) and Ethernet switches at 18.5 per cent.

IDC said that the first three quarters of 2018 were “exceptional”, noting in particular the increase in IT investments for public cloud data centres.

But, Yeshkova added, there would be “some slowdown in 2019 as the overall market cools down and some cloud providers work through adjustments in their supply chain”.

In the long term, IDC said it expects a five-year compound annual growth rate of 13.3 per cent for cloud IT infrastructure spending, reaching $88.6bn in 2022, by which point it will account for 57.6 per cent of total spending.

Of this, IDC said public cloud data centres will be the main spenders, accounting for 66.3 per cent of the cash.


Worldwide cloud IT infrastructure vendor revenue; market share; YoY growth, Q3 ’18

$2.395bn 14.2% $1.590bn 13.9% 50.7%
$1.646bn 9.8% $1.440bn 12.6% 14.2%
$1.075bn 6.4% $923m 8.1% 16.4%
$1.059bn 6.3% $379m 3.3% 179.4%
$806m 4.8% $285m 2.5% 182.5%
$6.135bn 36.5% $4.046bn 35.4% 51.6%
$3.698bn 22.0% $2.761bn 24.2% 34.0%
$16.815bn 100.0% $11.425bn 100.0% 47.2%

* Statistical tie (difference of 1 per cent or less between vendors)

** Due to the existing joint venture between HPE and the New H3C Group, IDC reports external market share on a global level for HPE as “HPE/New H3C Group”

The usual suspects topped the charts for Q3, with Dell bringing in revenues of $2.4bn for worldwide cloud IT infrastructure, compared with $1.6bn in the previous year’s quarter.

This was followed by HPE/New H3C Group, with revenues of $1.6bn in Q3; Cisco ($1.08bn) and Inspur ($1.06bn) and Lenovo ($806m). As you’d expect, they were all collectively outsold by designs from traditionally lower cost original design manufacturers.

Across the globe, regions increased their shift towards cloud gear by double digits in the quarter, but growth was the fastest in Asia Pacific region at 62.6 per cent year over year, with China growing at a steep 88.7 per cent. ®



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