Cloud infrastructure spending is on the rise

According to the International Data Corporation ( IDCWorldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment Spending on computing and storage infrastructure products for cloud infrastructure, including dedicated and shared environments, increased 13.5% year-over-year in the fourth quarter of 2021 (Q4 of 21) to $21.1 billion.

This was the second consecutive quarter of year-over-year growth as supply chain constraints have depleted supplier inventory in recent quarters. As the backlog continues to grow, pent-up demand bodes well for future growth as long as the economy remains healthy and supply meets demand.

For the full year of 2021, spending on cloud infrastructure was $73.9 billion, up 8.8% from 2020.

Investments in non-cloud infrastructure grew 1.5% year-over-year in the fourth quarter of 21 to $17.2 billion, posting growth for the fourth consecutive quarter. For the full year, spending on non-cloud infrastructure grew 4.2% in 2020, bringing total spending to $59.6 billion.

Spending on shared cloud infrastructure was $14.4 billion in the fourth quarter, up 13.9% from a year ago, and grew to $51.4 billion for 2021, an increase of 7.5%. IDC expects continued strong demand for shared cloud infrastructure, with spending expected to exceed spending on non-cloud infrastructure by 2022. Dedicated spending on cloud infrastructure grew 12.5% ​​year-over-year to $6.7 billion in Q421 and grew by 11.8% to $22.5 billion for the full year 2021. Of the total dedicated cloud infrastructure, 47.5% were deployed to customers in Q421 and 46.1% in 2021.

For 2022, IDC expects spending on cloud infrastructure to grow by 21.7% compared to 2021 to $90.0 billion, while non-cloud infrastructure is expected to decline slightly, by 0.3% to $59.4 billion. Spending on shared cloud infrastructure is expected to grow 25.5% year over year to $64.5 billion for the full year. Dedicated cloud infrastructure spending is expected to grow 13.1% to $25.4 billion by 2022.

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As part of Tracker, IDC tracks different classes of service providers and the amount of computing and storage infrastructure that service providers purchase, both cloud and non-cloud infrastructure. The service providers category includes cloud service providers, digital service providers, telecom service providers, and managed service providers. In the fourth quarter of 21, service providers as a group spent $21.2 billion on computing and storage infrastructure, an increase of 11.6% over the fourth quarter of 2020. These expenditures accounted for 55.4% of total spending on computing and storage infrastructure. For 2021, service provider spending was $75.1 billion at an annual growth rate of 8.5%, which is 56.2% of total spending on computing and storage infrastructure. IDC expects spending on computing and storage by service providers to reach $89.1 billion by 2022.

Regionally, cloud infrastructure spending grew year-over-year in most regions in Q421. The Asia/Pacific (excluding Japan and China) (APeJC) region recorded the largest growth of 59.5% year-over-year. Canada, Central and Eastern Europe, Japan, the Middle East, Africa, and China (PRC) experienced double-digit growth in spending. The United States grew by 5.6%. Western Europe and Latin America fell during the quarter. In 2021, APeJC achieved the largest growth of 43.7% year-over-year. Canada, Central and Eastern Europe, the Middle East, Africa and China saw double-digit growth in spending. Japan grew in the high single digits, while Western Europe grew in the low single digits. The United States grew by 1.5%. Latin America fell this year. For 2022, spending on cloud infrastructure is expected to grow for most regions, with the highest growth expected in the United States at 27.8%. Central and Eastern Europe is the only region that is expected to shrink in 2022, and spending is expected to decline by 21.7% year-on-year.

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In the long term, IDC forecasts that spending on cloud computing and storage infrastructure will have a compound annual growth rate (CAGR) of 12.6% over the 2021-2026 forecast period, reaching $133.7 billion in 2026 and representing 68.6% of total computing and infrastructure spending. for storage. Shared cloud infrastructure will represent 72.0% of the total amount of cloud and is growing at a compound annual growth rate of 13.4%. Spending on dedicated cloud infrastructure will grow at a compound annual growth rate of 10.7%. Spending on non-cloud infrastructure will decline at a compound annual growth rate of 0.5%, to $61.2 billion in 2026. Service provider spending on computing and storage infrastructure is expected to grow at a compound annual growth rate of 11.7%, to $130.6 billion by 2026.

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