IDC Sees ‘Unusually’ High-Growth In Cloud Infrastructure Spend For Q2

IDC expects to see continuous strong demand for shared cloud infrastructure in 2023 with investments forecast to surpass non-cloud infrastructure.

Investments in global compute and storage infrastructure products for cloud deployments grew 22.4 per cent in the second quarter of 2022 to $22.6bn.

According to IDC, spending on cloud infrastructure continues to outgrow the non-cloud segment although the latter had strong growth in Q2 as well, rising 15.2 per cent year on year to $17.3bn.

The researcher highlighted an infrastructure refresh cycle, increasing prices, system shipments toward the accumulated backlogs from previous quarters, and anticipation of tougher economic conditions, which might impact IT spending in the upcoming quarters, as contributors to the atypically high growth in spending across both segments.

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Spending on shared cloud infrastructure reached $15.6bn during the quarter, swelling 18.9 per cent compared to a year ago.

IDC said it expects to see continuous strong demand for shared cloud infrastructure with spending expected to surpass non-cloud infrastructure spending in 2023.

The dedicated cloud infrastructure segment surged 30.9 per cent in Q2 to $7bn.

Of the total dedicated cloud infrastructure, 46.3 per cent was deployed on customer premises.

Service Providers Spending Grows

IDC data found that service providers spent $22.6bn on compute and storage infrastructure, up 19.7 per cent from Q2 2021.

It added this spending accounted for 56.7 per cent of the total market.

Non-service providers (enterprises, government) upped investments at a similarly high rate - 18.5 per cent year on year - setting another record quarter for growth in this segment driven by deployments of dedicated clouds in addition to developments mentioned above.

IDC expects compute and storage spending by service providers to reach $88.3bn in 2022, an increase of 13.9 per cent.

Central And Eastern Europe IT Suffers Spending Dip

On a geographic basis, investments in cloud infrastructure in Q2 increased in all regions except Central and Eastern Europe (CEE), which slumped 42.9 per cent due to the Russia-Ukraine war.

Middle East and Africa (MEA), and Asia/Pacific (excluding China and Japan) (APeCJ) grew the most at 41.6 per cent and 40 per cent respectively.

IDC said all other regions demonstrated growth in the low teens to 25 per cent range, making Q2 2022 one of the strongest quarters for cloud infrastructure investment growth across the globe.

For 2022, cloud infrastructure spending is expected to grow in all regions except CEE, with three regions, APeCJ, MEA, and Western Europe, expecting to post annual growth in the 20-25 per cent range.

IDC FY22 IT Cloud Spend Outlook

For the full year 2022, IDC is forecasting cloud infrastructure spending to grow 17 per cent to earn $88.9bn - a noticeable increase from ten per cent annual growth in 2021, it said.

Non-cloud infrastructure is expected to be up by 6.1 per cent to $66.4bn.

Shared cloud infrastructure is expected to grow 15.1 per cent year to $61bn for the full year while spending on dedicated cloud infrastructure is expected to rise 21.4 per cent to $27.9bn for the full year.

This article originally appeared on CRN’s sister site, Channel Partner Insight.