Cloud infrastructure for the first time more important than traditional IT

The revenue generated in the cloud sector in the third quarter of last year was for the first time greater than that generated in the traditional IT sector. This trend will continue in the coming years.

In the third quarter of 2018, total sales in the cloud market were $16.8 billion. That’s what IDC says. For that figure, market research agency looks at the sales of servers with associated storage and network equipment such as switches. IDC does not distinguish between public and private cloud.

For the first time since IDC has kept track of the figures, sales in the cloud market have exceeded sales in the traditional IT market. With 50.9 percent for cloud, the difference is not yet huge, but IDC predicts that it will only grow in the coming years. For the full year 2018, however, the balance will remain on the side of traditional IT revenue.

Growth everywhere

Cloud computing is driving growth, with sales up 59.1 percent in the third quarter. The market for switches is growing by 18.5 percent, for storage by 20.4 percent. The traditional IT market also continues to grow, although the growth rate has dropped to 14.9 percent. IDC notes that that’s still a lot. The good figures are a result of a global upgrade to new technology. As soon as the upgrade cycle is completed, the figure will fall, and the importance of the cloud will increase even faster.

In Q3, Dell was by far the largest cloud vendor with a market share of 14.2 percent, 0.3 percent more than the same period in 2017. HPE is in second place but is being hit: its market share drops from 12.6 percent to 9.8 percent.

The figures illustrate how the centre of gravity of today’s IT environment increasingly lies in the cloud. The demand for more online computing power and storage is constantly increasing, while data centres are also being upgraded to the latest technology.