A recent report by the International Data Corporation (IDC) has revealed that spending on compute and storage infrastructure products for cloud deployments, including dedicated and shared IT environments, increased 36.9 percent year-over-year (YoY) in the first quarter of 2024 (1Q24) to US$33.0 Billion. This was largely on the back of the Artificial Intelligence (AI) boom.
In an official statement, Juan Pablo Seminara, Research Director for IDC’s Worldwide Enterprise Infrastructure Tracker said, “Cloud infrastructure spending growth continues being driven by the explosion of AI-related investments, which not only impact servers but also started to have positive influence on enterprise storage as well.”
IDC is also upbeat on the growth AI and predicts that investments are only going to increase any time in the near future. “Even though some caution still remains on the socio-political side, it has become clear that AI investment plans are not slowing down in 2024 and will continue growing at a high rate this year and beyond. Additionally, the improvement on economic prospects contributes to a very positive spending outlook for 2024 and 2025 where cloud-based spending will increase at double-digit pace,” said Seminara.
Cloud vs Non-Cloud Infrastructure
The report, titled Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment also revealed that spending on cloud infrastructure continues to outgrow the non-cloud segment, with the latter growing by 5.7 percent in 1Q24 to US$13.9 Billion. For 2024, IDC is forecasting that cloud infrastructure spending will grow 26.1 percent compared to 2023, to US$138.3 Billion. Non-cloud infrastructure is forecast to grow 8.4 percent to US$64.8 Billion.
Long term, IDC predicts spending on cloud infrastructure will have a Compound Annual Growth Rate (CAGR) of 14.3 percent over the 2023-2028 forecast period, reaching US$213.7 Billion in 2028 and accounting for 75.0 percent of total compute and storage infrastructure spend.
Shared vs Private Cloud Infrastructure
The report said that spending on shared (public) cloud infrastructure reached US$26.3 Billion in the quarter, increasing 43.9 percent compared to a year ago. The shared cloud infrastructure category continues to hold the largest share of spending compared to dedicated (private) cloud deployments and non-cloud spending.
In 1Q24, shared cloud accounted for 56.1 percent of total infrastructure spending. The dedicated cloud infrastructure segment saw lower growth of 15.3 percent (YoY) in 1Q24 to US$6.7 Billion.
According to the IDC report, shared cloud infrastructure is expected to grow 30.4 percent (YoY) to US$108.3 Billion for the full year. Spending on dedicated cloud infrastructure is also expected to have double-digit growth in 2024 at 12.8 percent reaching US$30.0 Billion for the full year.
Shared cloud infrastructure spending will account for 77.5 percent of the total cloud spending in 2028, growing at a 14.8 percent CAGR and reaching US$165.6 Billion. Spending on dedicated cloud infrastructure will grow at a CAGR of 12.6 percent to US$48.2 Billion. Spending on non-cloud infrastructure will also rebound with a 3.6 percent CAGR, reaching US$71.4 Billion in 2028.
