Nomura estimates capital spending on cloud services hit USD45 billion in 2015, up 24% from the USD36 billion in 2014. It said much of the development has gone to Amazon’s Amazon Web Services and Microsoft’s Azure and Office365 cloud services.
“The revenue trends here are robust as ever, which lends confidence to our view that capital expenditures will continue to expand,” Nomura told in a research report. Amazon and Microsoft “account for a material percentage of the growth of traditional IT hardware spending,” Nomura said.
Nomura said it observed 50 global chief information officers in an early month to gauge their spending priorities. Cloud computing is a driver for 70% of CIOs, while software-defined data centers drive 34%. These figures are up from 52% and 14%, respectively, in the last year survey.
Among the big beneficiaries of the cloud spending is Arista Networks (ANET), Nomura said. It expects Arista to maintain its rapid growth as it gains share in the hot data-center switching market.
Another beneficiary is fiber-optic company Ciena (CIEN). Ciena’s optical technology “targets the data-center interconnect market directly and, thus, ought to boost Ciena’s mix of data-center revenue,” Nomura informed.
Other beneficiaries are Infinera (INFN), Broadcom (AVGO) and Juniper Networks (JNPR).
The survey concludes CIOs now anticipates 65% of 2018 workloads to be in the cloud, up from 57% in its last month survey. This compares with 48% of workloads in the cloud in 2016.