Spending on compute and storage infrastructure products for cloud deployments went up almost 8% year on year for the second quarter of 2023 to $24.6 billion (£20.36bn), according to IDC.
The biggest winner among the categories was shared cloud infrastructure, for which spending grew 13.7% year on year to $17.9bn in the quarter, and has on its own surpassed non-cloud spending, with the latter declining 8.3% year-over-year in the most recent quarter, to $14.4bn. Shared cloud infrastructure accounted for almost half (45.8%) of total infrastructure spending, with the dedicated cloud infrastructure segment declining to the tune of 4.9%.
Looking at the yearly forecast, based on IDC’s Worldwide Enterprise Infrastructure Tracker, the analyst firm expects cloud infrastructure spending to grow 10.6% compared with 2022 at $101.4bn, while non-cloud infrastructure will decline 7.9% to $58.5bn. The gap will therefore increase with shared cloud infrastructure, which is pegged at $72bn for the year.
IDC noted that the ‘subdued’ forecast for the non-cloud bracket ‘reflects the expectation that the market will face headwinds’, but noted that cloud spending more broadly ‘will remain positive due to new and existing mission-critical workloads, which often require higher-end, performance-oriented systems.’
“Cloud infrastructure spending is shifting towards robust configurations geared towards more complex workloads and new AI initiatives,” said Juan Pablo Seminara, IDC research director. “Despite the steep decline in system unit demand for the first half of the year, the spending outlook for 2023 remains positive with growth centred on the expectation that higher ASPs (average selling prices) will remain for the rest of the year.”
Longer-term trends continue to tick upwards. IDC expects that by 2027, spending on cloud infrastructure will reach $156.7bn, at a CAGR of 11.3% and accounting for almost 70% (69.4%) of total compute and storage infrastructure spend.
Photo by Josh Appel on Unsplash
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