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IDC: Public clouds to surpass non-cloud spending this year

So long as the economy stays healthy, and supply can catch up to demand

IDC forecasts that spending on compute and storage systems for cloud infrastructure will grow 21.7 percent this year compared to 2021. Spending on public clouds is also expected to pass that of non-cloud infrastructure in 2022.

The research firm made the predictions as part of its latest Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment report, which follows the proportion of compute and storage hardware products that are being sold into cloud environments.

IDC found that in 4Q21, total spending on cloud infrastructure increased 13.5 percent to $21.1 billion compared with the same quarter in 2020. This was the second consecutive quarter of year-on-year growth, with IDC noting that the ongoing supply chain constraints have depleted vendor inventories over the past several quarters, which means that pent-up demand will likely lead to more growth in future, so long as the supply chain can keep up.

In contrast, investments in non-cloud infrastructure increased by just 1.5 percent year-on-year during 4Q21 to $17.2 billion.

Full-year spending figures for 2021 were $73.9 billion for cloud infrastructure – up 8.8 percent compared with 2020 – and $59.6 billion for non-cloud infrastructure – up 4.2 percent versus 2020.

Breaking out the figures, IDC says the shared cloud infrastructure spend, which essentially means public clouds, reached $14.4 billion in 4Q21, an increase of 13.9 percent year-on-year. The figure for the whole of 2021 was $51.4 billion, an increase of 7.5 percent.

Spending on dedicated cloud infrastructure, meaning private clouds, was $6.7 billion for the same quarter, an increase of 12.5 percent year-on-year, while the figure for the whole of 2021 came to $22.5 billion, representing an 11.8 percent increase.

Looking ahead to the rest of this year, IDC said it expects to see total cloud infrastructure spending to grow by 21.7 percent during 2022, reaching an estimated $90 billion.

One key prediction from this IDC report is that the strong demand for shared (public) cloud infrastructure will see the level of spending here overtake spending on non-cloud infrastructure this year.

Accordingly, shared cloud infrastructure spending is expected to grow by 25.5 percent this year to $64.5 billion, while spending on non-cloud infrastructure is expected to actually decline slightly by 0.3 percent to $59.4 billion for the whole year.

Meanwhile, spending on dedicated cloud infrastructure is forecast to grow by 13.1 percent to $25.4 billion for the whole of 2022.

IDC also tracks regional differences in cloud infrastructure spending. For 4Q21, the most growth was seen in the Asia-Pacific, excluding Japan and China, at 59.5 percent year-on-year. China, Japan, Canada, Central and Eastern Europe, and Middle East and Africa all saw double-digit growth, while the US grew 5.6 percent, and Western Europe and Latin America actually saw a decline in spend versus the same quarter in 2020.

For the whole of 2021, Asia-Pacific was again the high-growth area, at 43.7 percent, IDC said. Canada, Central and Eastern Europe, Middle East and Africa, and China all saw a double-digit growth in spending. Japan's growth was in high single digits, while Western Europe was in low single digits. The US grew by just 1.5 percent for the whole year, while Latin America declined.

Gazing into its crystal ball, IDC forecasts that spending on compute and storage for cloud infrastructure will see a compound annual growth rate (CAGR) of 12.6 percent over the period 2021-2026.

This would see it reach a total of $133.7 billion in 2026, compared with a projected total of $61.2 billion for non-cloud infrastructure. Shared (public) clouds are expected to account for 72 percent of total cloud infrastructure spend by then. ®

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