Spending on cloud infrastructure is on the upswing

 

Spending on cloud infrastructure increased by nearly 8% in Q2 2023, while spending on non-cloud hosted infrastructure declined. These trends show: The need for robust configurations for complex workloads and AI initiatives is growing.

Spending on compute and storage infrastructure products in cloud deployments saw impressive year-on-year growth of almost 8% in the second quarter of 2023. Thus, according to the latest data from IDC, they rose to 24.6 billion US dollars (20.36 billion euros).

Shared cloud infrastructure tops the winners list

Particularly notable is the growth in shared cloud infrastructure, where spending rose 13.7% year-on-year to $17.9 billion in the latest quarter. However, this increase outpaced spending on non-cloud hosted infrastructure, which fell 8.3% to $14.4 billion. Meanwhile, shared cloud infrastructures account for nearly half (45.8%) of total infrastructure spending, while dedicated cloud infrastructure has decreased by 4.9%.

Forecast: Continued growth for cloud infrastructure and challenges for non-cloud hosted infrastructure

IDC’s forecasts are based on the Worldwide Enterprise Infrastructure Tracker. For 2023, they foresee a growth of 10.6% in cloud infrastructure spending to 101.4 billion US dollars. Non-cloud hosted infrastructure, on the other hand, is expected to decline 7.9% to $58.5 billion.

IDC emphasized that the forecast for non-cloud hosted infrastructure is “cautious” due to expected challenges. Still, overall cloud spending is expected to “remain positive due to new and existing mission-critical workloads that often require performance-oriented systems.”

Future trends: focus on complex workloads and AI initiatives

Juan Pablo Seminara, Research Director at IDC, highlighted that “cloud infrastructure spending is shifting toward higher-performance configurations targeted at more complex workloads and new AI initiatives.” Despite a drop in demand in the first half of the year, the outlook for 2023 remains positive. Higher average selling prices are expected.

Long-term trends continue to point upward. IDC forecasts that cloud infrastructure spending will reach $156.7 billion by 2027. This represents an annual growth rate of 11.3% and accounts for nearly 70% (69.4%) of total compute and storage infrastructure spending.

The future of cloud infrastructure spending looks promising. Enterprises are increasingly investing in high-performance systems to meet the demands of complex workloads and AI initiatives. As a result, cloud infrastructure remains on a growth trajectory and is expected to continue to outpace non-cloud hosted infrastructure.

Source: Cloud Computing News