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Cloud sales topped non-cloud infrastructure sales for the first time

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The pandemic has led to a major shift in the way in which business and consumers use online services which is why the analyst firm IDC believes that the second quarter of this year marked a tipping point as cloud sales exceeded non-cloud infrastructure for the first time.

According to the firm's Worldwide Quarterly Cloud IT Infrastructure Tracker, vendor revenue from sales of IT infrastructure products for cloud environments including servers, enterprise storage and Ethernet switches increased by 34.4 percent year over year during Q2. At the same time though, investments in traditional, non-cloud infrastructure declined by 8.7 percent year over year during the same period.

There was a worldwide shift to online tools across both businesses and consumers during the pandemic and this led to an increase in adoption of collaboration software, video conferencing software and telemedicine which are all powered by the cloud.

During the second quarter of this year, spending on public cloud IT infrastructure increased by 47.8 percent year over year to reach $14.1bn while spending on private cloud infrastructure increased by 7 percent year over year to $5bn with on-premises private cloud accounting for 64.1 percent of this amount. 

Tipping point

IDC believes that the hardware infrastructure market has reached the tipping point and that cloud environments will continue to account for an increasingly high share of overall spending.

Spending on cloud IT infrastructure increased across all regions during the Q2 of this year with China and the US delivering the highest annual growth rates at 60.5 percent and 36.9 percent respectively. Additionally, in all regions except Central and Easter Europe and the Middle East and Africa, growth in public cloud infrastructure exceeded growth in private cloud IT during this time period.

When it comes to the companies leading the Cloud IT Infrastructure market, Dell Technologies took the top spot with 2.4bn in revenue and a 13.2 percent market share followed by HPE/New H3C Group at almost $2bn in revenue and 10.4 percent market share. Inspur and Inspur Power Systems took third place followed by Lenovo and Cisco.

Now that businesses across a variety of industries have learned that their employees can work from home productively, expect cloud spend to remain high especially as workers will likely want to continue using the software and services they used while working remotely when they return to the office.

Via The Register