FRAMINGHAM, MA – Vendor revenue from sales of IT infrastructure products (server, enterprise storage, and ethernet switch) for cloud environments, including public and private cloud, increased 2.2% in the first quarter, while investments in traditional, non-cloud and infrastructure plunged 16.3% year-over-year, according to International Data Corp.
The broadening impact of the Covid-19 pandemic was the major factor driving infrastructure spending in the first quarter, the firm says. Widespread lockdowns across the world and staged reopening of economies triggered increased demand for cloud-based consumer and business services, driving additional demand for server, storage, and networking infrastructure used by cloud service provider data centers. As a result, public cloud was the only deployment segment escaping year-over-year declines in the first quarter, reaching $10.1 billion in spend on IT infrastructure, growth of 6.4% year-over-year. Spending on private cloud infrastructure declined 6.3% year-over-year to $4.4 billion.
IDC expects the pace set in the first quarter will continue through rest of the year, as cloud adoption continues to get an additional boost driven by demand for more efficient and resilient infrastructure deployment. For the full year, investments in cloud IT infrastructure will surpass spending on non-cloud infrastructure, reaching $69.5 billion, or 54.2%, of the overall IT infrastructure spend. Spending on private cloud infrastructure is expected to recover during the year and will compensate for the first quarter declines, leading to 1.1% growth for 2020. Spending on public cloud infrastructure will grow 5.7% to reach $47.7 billion, representing 68.6% of the total cloud infrastructure spend.
Disparity in 2020 infrastructure spending dynamics for cloud and non-cloud environments will ripple through all three IT infrastructure domains: ethernet switches, compute, and storage platforms. Within cloud deployment environments, compute platforms will remain the largest category of spending on cloud IT infrastructure at $36.2 billion, while storage platforms will be the fastest growing segment, with spending increasing 8.1% to $24.9 billion. The ethernet switch segment will grow 3.7% year-over-year.
At the regional level, year-over-year changes in vendor revenues in the cloud IT Infrastructure segment varied significantly during the first quarter, ranging from 21% growth in China to a decline of 12.1% in Western Europe.