Cloud computing: record spending in 2022

Cloud spending is expected to reach another major turning point as enterprise customers spent $18.3 billion on cloud computing and storage infrastructure in the first quarter of 2022, an increase of 17.2% from last year.

This total includes budgets for shared and dedicated infrastructure. The main driver of growth was spending on shared cloud infrastructure, which amounted to $12.5 billion (68%) of the total. This subcategory is also up 15.7% from the first quarter of 2021, according to an IDC analyst.

With the demand for shared cloud spending in particular on the rise, IDC expects spending on shared cloud infrastructure to exceed non-cloud spending in 2022 for the first time.

Non-cloud spending is fixed

IDC monitors the relative spending between cloud and non-cloud infrastructure to measure the evolution of traditional computing, storage, and IT infrastructure operations in the data center in the public cloud. Amazon Web Services (AWS), Microsoft Azure, Google Cloud, and other companies such as Digital Ocean.

The outlook looks strong for non-cloud IT infrastructure providers, but it’s not as rosy as cloud providers. During the quarter, spending on non-cloud infrastructure grew even more year-over-year, reaching $14.8 billion, an increase of 9.8%. This is the fifth consecutive quarter of growth.

IDC does not provide an overview of the revenue breakdown among public cloud providers, but analyst Canalys recently reported that AWS received 33% of the $53.5 billion spent worldwide on cloud infrastructure in the fourth quarter of 2021, followed by 22% for Azure and 9% for Google Cloud. Other suppliers took the remaining 36%.

Spending on cloud infrastructure has accelerated since the start of the pandemic in March 2020 as companies accelerate their digital transformation. Spending has increased for seven consecutive quarters since the third quarter of 2019, except for a 1.9% year-over-year decline in the second quarter of 2021. The second quarter of 2020 saw the highest annual growth rate of 38.4%. In the fourth quarter of 2021, spending on cloud infrastructure grew 13.5% q-o-q, to ​​$21.1 billion.

2022 in strong growth

Non-cloud spending remains a huge market and is expected to grow throughout the year – albeit at a much slower pace than cloud spending.

For 2022, IDC forecasts that spending on cloud infrastructure will increase by 22% compared to 2021 and will reach $90.2 billion. The company notes that this is the highest annual growth rate since 2018. Spending on traditional IT infrastructure is expected to rise 1.8% to $60.7 billion.

The larger purchase of cloud-provided infrastructure explains only part of the increase in spending. Other contributing factors include inflation and the gradual recovery of stalled supply chains and logistics networks around the world.

Regionally, IDC expects cloud infrastructure spending to grow 20-25% annually in Asia Pacific/Japan, China, the United States and Western Europe. Due to Russia’s attack on Ukraine, speed in Central and Eastern Europe is expected to drop by 54% in 2022.

$145.2 billion in 2026

The analyst expects spending on cloud computing and storage infrastructure to grow at a compound annual growth rate (CAGR) of 14.5% between 2021 and 2026. He expects spending to reach $145.2 billion in 2026, and they will then represent 69.7% of total infrastructure spending Infrastructure for computing and storage. It expects spending on non-cloud infrastructure to grow at a compound annual growth rate of 1.2%, reaching $63.1 billion in 2026.

IDC also examines spending by cloud service providers, digital service providers, telecom service providers, and managed service providers, which accounts for 55.3% of IT infrastructure spending. This group spent $18.3 billion on computing and storage infrastructure in the first quarter of 2022, an increase of 14.5% year over year.

Spending by service providers other than service providers rose 12.9% year-over-year in the first quarter of 2022, the strongest growth in 14 quarters.

IT infrastructure service provider spending increased 18.7% year over year to $89.1 billion in 2022.


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