According to the International Data Corporation (IDC) Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment, spending on compute and storage infrastructure products for cloud deployments – including dedicated and shared IT environments – increased 61,5% YoY in the second quarter of 2024 (2Q24) to $42,9-billion.
Spending on cloud infrastructure continues to outgrow the non-cloud segment with the latter growing by 41,4% in 2Q24 to $19,4-billion. The cloud infrastructure segment experienced lower growth in unit demand at 17,7%, due to a continued increase in average selling prices (ASPs) – mostly related to the exponential increase of GPU server shipments.
“Cloud infrastructure spending growth continues to be driven by accelerated AI-related investments which especially impacted servers, but also triggered enterprise storage spending,” says Juan Pablo Seminara, research director, Worldwide Enterprise Infrastructure Trackers. “Different surveys conducted by IDC in 2024 show how AI investment plans have been scaling up and driving investment priorities for almost every region.
“Hyperscalers, digital service providers, and major cloud service providers are the ones that keep pushing the growth and that will continue to have a positive impact on the market during 2024 and 2025,” says Seminara. “And the improved economic prospects will help to extend the positive mood even further.”
Spending on shared cloud infrastructure reached $35,3-billion in the quarter, increasing 74,9% compared to a year ago. The shared cloud infrastructure category continues capturing the largest share of spending compared to dedicated deployments and non-cloud spending – with shared cloud accounting for 56,6% of the total infrastructure spending in 2Q24. The dedicated cloud infrastructure segment presented lower growth of 19,2% YoY in 2Q24 to $7,6-billion.
For 2024, IDC is forecasting cloud infrastructure spending to grow 48,8% compared to 2023 to $164-billion. Non-cloud infrastructure is expected to grow 11,7% to $67,5-billion. Shared cloud infrastructure is expected to grow 57,9% YoY to $131,9-billion for the full year. Spending on dedicated cloud infrastructure is also expected to have double-digit growth in 2024 at 20,4% reaching $32,1-billion for the full year.
The subdued growth forecast for non-cloud infrastructure at 11,7% in 2024 reflects that even though most of the growth will come from cloud spending, general non-cloud dedicated systems are consolidating their recovery this year.
IDC’s service provider category includes cloud service providers, digital service providers, communications service providers, hyperscalers, and managed service providers.
In 2Q24, service providers as a group spent $41,8-billion on compute and storage infrastructure, up 64,2% from the prior year. This spending accounted for 67,2% of the total market. Non-service providers (eg. enterprises, government, etc.) also increased their spending to $20,5-billion growing 38,2% YoY. IDC expects compute and storage spending by service providers to reach $157,8-billion in 2024, growing at 49,4% YoY.
On a geographic basis, YoY spending on cloud infrastructure in 2Q24 showed very positive results across all regions where the fastest growing regions were Asia/Pacific (excluding Japan and China), Japan, the US, and Canada with 110,7%, 98,1%, 72,1% and 53,8% YoY growth respectively. The other regions also showed very solid yearly increases with Central & Eastern Europe, Western Europe, China, Middle East & Africa, and Latin America growing by 48,7%, 27,7%, 24,8%, 23,4% and 9,7% in that order.
Long-term, IDC predicts spending on cloud infrastructure to have a compound annual growth rate (CAGR) of 18,1% over the 2023 to 2028 forecast period, reaching $253-billion in 2028 and accounting for 76,4% of total compute and storage infrastructure spend.
Shared cloud infrastructure spending will account for 78,6% of the total cloud spending in 2028, growing at a 18,9% CAGR and reaching $198,8-billion. Spending on dedicated cloud infrastructure will grow at a CAGR of 15,3% to $54,3-billion. Spending on non-cloud infrastructure will also rebound with a 5,3% CAGR, reaching $78,3-billion in 2028. Spending by service providers on compute and storage infrastructure is expected to grow at a 17,1% CAGR, reaching $233-billion in 2028.