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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 favoured, 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 data centre 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 customisation 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.”