High growth in network equipment in Q3 drove an 8.1% increase in cloud IT revenue

Currently, the pace of cloud data center construction is accelerating around the world, but according to IDC*** statistics, its impact on the cloud IT infrastructure market was not significant in the third quarter of 2016. In fact, the rapid growth of network equipment caused by the demand for upgrades is the real "lever" that drives the growth of cloud IT infrastructure market revenue.

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Rapid growth in network equipment drives revenue in cloud IT infrastructure market

According to statistics, the sales revenue of cloud IT infrastructure (including servers, storage and Ethernet switches) products increased by 8.1% to $8.4 billion compared with the same period in 2015. Among them, as the market expects that the construction of new hyperscale data centers will stimulate more growth, the sales of Ethernet switches have been rising, becoming the leader.

Comparison of revenues of the top 5 cloud IT infrastructure vendors worldwide in Q3 2015 and Q3 2016, data from IDC

Cloud IT infrastructure accounted for 39.2% of all IT spending in the third quarter, up 4.5% from a year ago. Sales of equipment related to private clouds reached $3.3 billion, up 8.2%, while sales of equipment related to public clouds reached $5.1 billion, up 8%.

In private cloud, Ethernet switches grew 60.8% year-over-year, storage grew 9%, and servers grew 3.2%. In public cloud, Ethernet switches grew 46.2% year-over-year, storage grew 3%, and servers grew 6.8%.

In contrast, revenue for traditional (non-cloud) IT infrastructure as a whole fell 10.8% compared to the same period in 2015. Servers saw the largest decline (12.9% year-on-year), while Ethernet switches and storage fell 1.6% and 8.6%, respectively.

From the data, we can see that network upgrades continue to drive the overall growth of cloud IT, and with the continuous construction of hyperscale cloud data centers, it will drive the deployment of new servers and storage devices in the next few quarters. Recently, emerging markets and small cloud service providers have also shown new potential. Because for system administrators, OpenStack has become a technical means to more easily achieve capacity expansion and maintenance, and the choice of private cloud by enterprises is becoming more feasible as deployment cases continue to increase and mature.