EMEA Cloud Hardware Spending To Hit $4bn By End Of Year

Cloud hardware investment is fast becoming the highest capital expenditure for EMEA companies with new data showing that $4 billion [£2.35 billion] will be spent on it by the end of 2014.

Research from IDC shows that overall investment in hardware for cloud environments by firms in the EMEA area will rise by 19 per cent compared to the previous year and reflects the growing trend for companies to invest in the cloud over on-premise solutions.

This is further reflected by the fact that 15 per cent of the overall infrastructure spend by EMEA companies in 2014 will be related to cloud environments compared to just eight per cent in 2011. This will grow further over the coming years and be worth over 22 per cent by 2018.

"The rise of cloud has triggered a revolution in the hardware market. While white-box and few large OEMs fight to absorb the surge in demand for public cloud, most incumbent hardware players invest heavily in offerings enabling on-premises and hosted private cloud environments, such as integrated systems, high-end networks, and high-performance storage,” said Giorgio Nebuloni, research manager, IDC EMEA Enterprise Server Group.

IDC estimates that around $3.4 billion [£2 billion] was spent on hardware for cloud environments in EMEA in 2013, an increase of 21 per cent when set against the figure for 2012.

The main drivers of cloud adoption, as identified by IDC’s report, are related to its easy scalability, agile mobile app support and lower total cost of ownership, with big data analysis contributing in minor but growing proportions.

Cloud penetration varies widely across all the countries that are part of the survey and is much more advanced in Western Europe than in many of the emerging countries.

Breaking it down, 42 per cent of cloud hardware spending was absorbed by public cloud environments, 38 per cent by on-premise private clouds and 20 per cent by hosted private clouds.

"In the longer term, IDC expects greater adoption of hybrid cloud with benefits for both private and public consumption. Hybrid cloud allows customers to retain sensitive data behind a corporate firewall while still taking advantage of cloud-related lower costs," added Mohammed Hefny, senior research analyst, IDC EMEA systems.

Image Credit: Flickr (Sarah Rifaat)