IDC Reports Decrease in On-Premise Hardware Spend Due to Cloud Migration

This week, the International Data Corporation (IDC) published the news that everyone’s been waiting for: IT hardware budgets in on-premise infrastructure is on the decline as cloud computing continues to rise.

According to Computer Weekly, research reported that around 62.8% of user spending is being used to buy servers, storage and Ethernet switches for use in traditional, on-premise environments. IDC projected this figure to decline by 4% in 2016, as service providers and enterprises move to build their own public and private clouds.

What does this mean for your business? Depending on where you are between the infrastructure and cloud, you may need to up your cloud game.

Natalya Yezhkova, IDC research director of storage systems, said enterprises are increasingly looking to cloud technologies to support their core business activities, and to support the launch of services and innovations. “For the majority of corporate and public organisations, IT is not a core business but rather an enabler for their core businesses and operations,” said Yezhkova. “Expansion of cloud offerings creates opportunities for these businesses to focus efforts on core competences while leveraging the flexibility of service-based IT.”

If you do have servers running on-site apps, expanding your business often requires new servers to support added software. But, using a server with virtualization built in, you can run more apps on the same server and gain capacity without the added cost of new hardware, IT maintenance, and power bills.The IDC tracker monitors the proportion of server, disk storage and networking hardware that is being bought and deployed in cloud and on-premise environments across the globe.

Overall, IDC anticipates that, “on-premise infrastructure spending is expected to decline at 1.3% CAGR, yet, cloud-focused infrastructure spending will rise by 18.9% in 2016 and hit $38.2bn, with around two-thirds (63.8%) of this amount ($24.4bn) being used to support public cloud builds.”

With these statistics in mind, the next time you need new technology, think about how you can invest your money smarter. Can you lower upfront costs with the cloud’s pay-as-you-go structure? Utilize the hybrid model to migrate to the cloud on your time? Get more value out of your servers through virtualization? IDC predicts public cloud deployments will account for around two-thirds of this infrastructure spend, with private cloud builds picking up the rest. Cloud is on the rise, and it’s important that your investments come along for the ride.