07 Aug 2015

Prague, August 7, 2015 - Following a very strong 2014, cloud spending on enterprise infrastructure in Central and Eastern Europe, the Middle East, and Africa (CEMA) declined by 7% in the first quarter of 2015, in contrast to 24% year-on-year growth in 2014. These results are revealed in the Worldwide Quarterly Cloud IT Infrastructure Tracker published by International Data Corporation (IDC).

“IDC believes this is a temporary slowdown in market poised for stable, double-digit growth, opposed to traditional hardware markets,” says Jiri Helebrand, a research manager in the Systems and Infrastructure Solutions team at IDC CEMA. Public cloud investments stalled in Central and Eastern Europe, particularly those related to server components of cloud infrastructure. “Subdued overall business in Russia and the uncertainty around data localization law were the main culprits,” adds Helebrand. “However, private cloud deployments are still favored, as they offer higher flexibility, lower CAPEX, and faster implementation than traditional IT infrastructure.”

Cloud infrastructure spending (Ethernet switch, server, and storage) accounted for 12% of total datacenter infrastructure investments in 2014 and 11% in Q1 2015. IDC expects the market to rebound before the end of 2015 and double in size by 2019 as both IT departments and line-of-business executives recognize the potential of cloud.

Private cloud (both on and off premise) will continue dominating cloud deployments in CEMA in the next few years. A recent IDC survey among large enterprises revealed that end users continue to rank security as their foremost cloud-related concern; it considerably surpassed all other issues, such as legal compliance, integration with existing infrastructure, cost, and customization requirements. “Hence, we still see the bulk of investments in the business sector directed to private cloud,” says Marina Kostova, a senior storage analyst in IDC’s Systems and Infrastructure Solutions team. “In sub-regional terms, however, there are substantial differences. Central and Eastern European countries are not only ahead of their MEA counterparts in terms of overall cloud adoption, but customers there are also more open to public cloud, due to the proximity of large cloud service providers, as well as the development of common standards in Europe.”

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Taxonomy Notes

IDC defines cloud services more formally through a checklist of key attributes that an offering must manifest to end users of the service. Public cloud services are shared among unrelated enterprises and consumers, are open to a largely unrestricted universe of potential users, and are designed for a market and not a single enterprise. The public cloud market includes a variety of services designed to extend or in some cases replace IT infrastructure deployed in corporate datacenters. It also includes content services delivered by a group of suppliers that IDC calls value-added content providers (VACPs).

Private cloud services are shared within a single enterprise or an extended enterprise with restrictions on access and level of resource dedication and defined/controlled by the enterprise (and beyond the control available in public cloud offerings); they can be onsite or offsite and can be managed by a third-party or in-house staff. For private cloud managed by in-house staff, "vendors (cloud service providers)" are equivalent to the IT departments/shared service departments within enterprises/groups. In this model, where standardized services are jointly used within the enterprise/group, business departments, offices, and employees are the "service users." Present also in WW and EMEA press releases because it is a new tracker.