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IDC predicts spending on cloud infrastructure to reach $135.1 billion at a CAGR of 12.9%

Cloud infrastructure

In the Q3 of 2022, increased demand and improved supply chains drove substantial growth in spending on compute and storage infrastructure products for cloud deployments. At an impressive 24.7% year-over-year increase to $23.9 billion, cloud investments far outpaced their non-cloud counterpart’s 16.5%, reaching $ 16.8 billion.

Shared cloud infrastructure spending reached $16.8 billion in Q3 2022, increasing 24.4% compared to a year ago. IDC expects strong demand for shared cloud infrastructure to continue, with spending expected to surpass non-cloud infrastructure spending in 2023. The dedicated cloud infrastructure segment grew 25.3% year over year in Q3 2022 to $7.1 billion, with 45.2% of the total deployed on customer premises.

In 2022, IDC has predicted that cloud infrastructure spending will rise significantly – a 19.6% increase from 2021’s 8.6%. Shared and dedicated cloud investments are expected to hit robust numbers of $60.9 billion and $27.3 billion respectively for the full year; additionally, non-cloud infrastructure is forecasted to amass an impressive 10.7 % growth reaching $64 .7billion.

cloud infrastructure

IDC monitors the amount of compute and storage technology – ranging from cloud to non-cloud-based solutions, utilized across a variety of service providers including cloud service providers, digital service providers, communications service providers, and managed service providers.

In the third quarter of 2022, service providers spent $23.9 billion on compute and storage infrastructure, which is 22.5% more than they did in the previous year. This spending made up 58.7% of the total market. Non-service providers, such as enterprises and government agencies, increased their spending by 19.3% year over year.

According to IDC, compute and storage spending by service providers is expected to reach $87.8 billion in 2022, growing at 17.5% per year.

In the third quarter of 2022, spending on cloud infrastructure grew in all regions except Central and Eastern Europe (CEE), which was impacted by the Russia-Ukraine war. In CEE, spending declined 35.1% year over year.

The Middle East and Africa (MEA), the United States (USA), and Western Europe are estimated to see sizable year-over-year increases of 65.8%, 32.1%, and 31.3% respectively – while other regions will experience growth in double digits as well.

For 2022, global cloud infrastructure investments are projected to surge significantly throughout most regions. Particularly in Asia/Pacific (excluding Japan and China), MEA, USA, and Western Europe – with these areas all expecting growth between 20-35% year-over-year.

As investments in cloud infrastructure surge forward, IDC forecasts a 12.9% compound annual growth rate over the 2021-2026 period with investment reaching $135.1 billion by 2026 and accounting for 67.3% of total compute and storage spend across the globe.

Growing at a 13.8% CAGR, shared cloud infrastructure will account for 72.3% of the total cloud spending. Spending on dedicated cloud infrastructure will also increase at a CAGR of 10.7% to reach $37.4 billion.  

Spending on non-cloud infrastructure will grow at a CAGR of 2.3%, reaching $65.6 billion in 2026. Service providers’ spending on compute and storage infrastructure will increase at a CAGR of 12.1% in 2026 to reach $131.9 billion.

Source: IDC

Read next: Gartner lists the top 10 strategic predictions for 2023 and beyond

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