Cloud infrastructure spend continues to outgrow non-cloud - IDC
According to the International Data Corporation (IDC) Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment, spending on compute and storage infrastructure products for cloud deployments, including dedicated and shared IT environments, increased 24.7% year over year in the third quarter of 2022 (3Q22) to $23.9 billion.
Spending on cloud infrastructure continues to outgrow the non-cloud segment although the latter had strong growth in 3Q22 as well, increasing at 16.5% year over year to $16.8 billion, IDC states.
The market continues to benefit from high demand and large backlogs, coupled with an improving infrastructure supply chain. Spending on shared cloud infrastructure reached $16.8 billion in the quarter, increasing 24.4% compared to a year ago.
IDC expects to see continuous strong demand for shared cloud infrastructure with spending expected to surpass non-cloud infrastructure spending in 2023.
The dedicated cloud infrastructure segment grew 25.3% year over year in 3Q22 to $7.1 billion. Of the total dedicated cloud infrastructure, 45.2% was deployed on customer premises.
For the full year 2022, IDC is forecasting cloud infrastructure spending to grow 19.6% year over year to $88.1 billion - a noticeable increase from 8.6% annual growth in 2021.
Non-cloud infrastructure is expected to grow 10.7% to $64.7 billion. Shared cloud infrastructure is expected to grow 19.0% year over year to $60.9 billion for the full year while spending on dedicated cloud infrastructure is expected to grow 21.2% to $27.3 billion for the full year.
IDC tracks various categories of service providers and how much compute and storage infrastructure these service providers purchase, including both cloud and non-cloud infrastructure.
The service provider category includes cloud service providers, digital service providers, communications service providers, and managed service providers. In 3Q22, service providers as a group spent $23.9 billion on compute and storage infrastructure, up 22.5% from the prior year. This spending accounted for 58.7% of the total market.
Non-service providers (for instance, enterprises, government, etc.) increased their spending at a similarly high rate, 19.3% year over year. IDC expects compute and storage spending by service providers to reach $87.8 billion in 2022, growing at 17.5% year over year.
On a geographic basis, for the full year 2022, cloud infrastructure spending is expected to grow in all regions except CEE, with four regions - Asia/Pacific (excluding Japan and China), MEA, USA, and Western Europe - expecting to post annual growth in the 20-35% range.
Long term, IDC predicts spending on cloud infrastructure to have a compound annual growth rate (CAGR) of 12.9% over the 2021-2026 forecast period, reaching $135.1 billion in 2026 and accounting for 67.3% of total compute and storage infrastructure spend.
Shared cloud infrastructure will account for 72.3% of the total cloud amount, growing at a 13.8% CAGR. Spending on dedicated cloud infrastructure will grow at a CAGR of 10.7% to $37.4 billion. Spending on non-cloud infrastructure will have a CAGR of 2.3%, reaching $65.6 billion in 2026. Spending by service providers on compute and storage infrastructure is expected to grow at a CAGR of 12.1%, reaching $131.9 billion in 2026.
IDC's Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment is designed to provide clients with a better understanding of what portion of the compute and storage hardware markets are being deployed in cloud environments.
