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High demand boosts global spending on cloud infrastructure — IDC

Improving supply chain infrastructure and high demand continue to boost global spending on cloud infrastructure posting an increase of 24.7% year over year (YoY) in the third quarter of 2022 (3Q22). According to the data from International Data Corp. (IDC), spending reached $23.9 billion in the period.

As organizations ramp up their compute and storage infrastructure products for cloud deployments, investments in cloud infrastructure continue to outgrow the non-cloud segment, the IDC said. However, the non-cloud segment is also experiencing growth of 16.5% YoY to $16.8 billion in 3Q22.

Investments in shared cloud infrastructure (services shared among unrelated enterprises and consumers) reached $16.8 billion in the quarter, increasing 24.4% compared to a year ago. 

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“IDC expects to see continuous strong demand for shared cloud infrastructure with spending expected to surpass non-cloud infrastructure spending in 2023,” the market intelligence firm said. “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.”

Shared, dedicated cloud

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 (shared within a single enterprise or an extended enterprise with restrictions on access ) is expected to grow 21.2% to $27.3 billion for the full year.

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 (e.g., 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.

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.

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