Spending on compute and storage infrastructure products for cloud infrastructure, including dedicated and shared environments, increased 13.5% year-over-year in the fourth quarter of 2021 (4Q21) to $21.1 billion according to the Needham, Mass-based International Data Corporation (IDC).
As supply chain constraints have depleted vendor inventories over the past several quarters, IDC reports year-over-year growth in cloud infrastructure spending. As backlogs continue to grow, the demand bodes well for future growth, according to IDC; as long as the economy stays healthy, and supply catches up with the demand.
In 2021, cloud infrastructure spending totaled $73.9 billion, up 8.8% over 2020. Spending on shared cloud infrastructure reached $14.4 billion in the fourth quarter, increasing 13.9% compared to a year ago, and grew to $51.4 billion for 2021, an increase of 7.5%.
IDC says it expects to see continuously strong demand for shared cloud infrastructure with spending projected to surpass non-cloud infrastructure spending in 2022.
However, spending on dedicated cloud infrastructure increased 12.5% year-over-year in 4Q21 to $6.7 billion and grew 11.8% to $22.5 billion for the full year 2021. Of the total dedicated cloud infrastructure, 47.5% in 4Q21 and 46.1% in 2021 were deployed on customer premises.
Related: Cloud Infrastructure Spending To Reach $112.9 billion by 2025
For the rest of 2022, IDC is forecasting cloud infrastructure spending to grow 21.7% compared to 2021 to $90.0 billion, while non-cloud infrastructure is expected to decline slightly, down 0.3% to $59.4 billion.
Shared cloud infrastructure spending is expected to grow 25.5% year-over-year to $64.5 billion for the full year. Spending on dedicated cloud infrastructure is expected to grow 13.1% to $25.4 billion in 2022.
How much do service providers spend on cloud infrastructure?
As part of IDC’s Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment, tracks various categories of service providers and how much compute and storage infrastructure these service providers purchase, including both cloud and non-cloud infrastructure.
In 4Q21, service providers, as a group, spent $21.2 billion on compute and storage infrastructure, up 11.6% from 4Q20. This spending accounted for 55.4% of total compute and storage infrastructure spending.
For 2021, spending by service providers reached $75.1 billion on 8.5% year-over-year growth, accounting for 56.2% of total compute and storage infrastructure spending.
IDC expects compute and storage spending by service providers to reach $89.1 billion in 2022, growing at 18.7% year-over-year.
Future Cloud Spending Forecasts
Long term, IDC expects spending on compute and storage cloud infrastructure to have a compound annual growth rate (CAGR) of 12.6% over the 2021-2026 forecast period, reaching $133.7 billion in 2026 and accounting for 68.6% of total compute and storage infrastructure spend.
Shared cloud infrastructure will account for 72.0% of the total cloud amount, growing at a 13.4% CAGR.
Spending on dedicated cloud infrastructure will grow at a CAGR of 10.7%. Spending on non-cloud infrastructure will flatten out at a CAGR of 0.5%, reaching $61.2 billion in 2026.
Spending by service providers on compute and storage infrastructure is expected to grow at a 11.7% CAGR, reaching $130.6 billion in 2026.
If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our digital newsletters!
Leave a Reply