IaaS revenue to triple by 2020, to $43.6bn

The on-premises pie is shrinking, but perhaps not disastrously

Infrastructure as a service sold by public clouds will become a US$43.6 billion market by 2020, according to abacus-rattling firm IDC's new Worldwide Public Cloud Infrastructure as a Service Forecast, 2016-2020.

In 2016 the firm expects infrastructure as a service (IaaS) hauled $12.6 billion through the door in 2015, meaning the figure predicted for 2020 represents a compound annual growth rate (CAGR) of 28.2% over the forecast period.

But the forecast also offers some nuggets of data that support a less rosy view of IaaS, such as a survey result gathered from 6,000 IT shops finding that “nearly two thirds of the respondents are either already using or planning to use public cloud IaaS by the end of 2016.” IDC's not saying how “nearly” it got to two thirds, but more than 33 per cent of organisations not yet considering cloud seems high.

Consider, also, that headline $43.6 billion figure. Sure, it represents a $31bn jump on today's spend, which looks like bad news for the hardware companies that provide on-premises infrastructure. If your glass is half full, $7.5bn a month across the industry might represent a nasty-but survivable reduction in spend. Dell and HPE both do about $12bn a quarter. EMC did about $5.5bn and Lenovo's enterprise sales aren't far behind. IBM does about $1.7bn and NetApp 1.5bn. Even among that handful of companies quarterly revenue is about $38bn. Being left with $30bn to scrap over each quarter isn't a horrid prospect, And that figure assumes the companies we've mentioned don't do well selling to IaaS players which are surely going to need lots of kit to serve the load behind a tripling in revenue.

As the infrastructure vendors scrap, they'll also be heartened by IDC's prediction that “For many enterprises, a hybrid infrastructure mixing existing IT infrastructure with cloud infrastructure represents the optimal path to public cloud IaaS adoption.”

“In fact, hybrid cloud infrastructure is already a common pattern at several large enterprises and IDC predicts that 80% of IT organizations will be committed to hybrid architectures by 2018.”

This on-premises infrastructure caper may well have life in it yet. ®

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