NEEDHAM, Mass.—Spending on compute and storage infrastructure products for cloud infrastructure, including dedicated and shared environments, increased 6.6% year over year in the third quarter of 2021 to $18.6 billion, according to the International Data Corporation (IDC) “Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment.”
The growth resumes the trend of net positive year-over-year spending growth per quarter, which saw a pause in Q2 2021 when spending decreased 1.9%.
That slight decline followed seven quarters of year-over-year spending growth that started in Q3, 2019 and included 38.4% growth in Q2 2020 as the first global pandemic wave prompted a spike in investments in cloud services and infrastructure.
The IDC also reported that spending on shared cloud infrastructure reached $13 billion, an increase of 8.6% compared to Q3 2021, and a 6.6% increase from the previous quarter.
This returned the sector to a trend of year-over-year growth since 4Q 2019 that was interrupted in Q2. In contrast, an exceptionally strong 2Q 2020 that saw spending increase 55.1% driven by the spike in demand for public cloud services in the first months of the pandemic, IDC said.
IDC expects to see continuously strong demand for shared cloud infrastructure with spending surpassing non-cloud infrastructure spending in 2022.
The IDC also reported that spending on dedicated cloud infrastructure increased 13.4% year over year in Q3 2021 to $5.6 billion, the highest year-over-year increase since Q1 2019 with 45.5% of this amount deployed on customer premises. IDC expects that spending on cloud environments will continue to outpace non-cloud spending throughout its forecast.
For the full year 2021, IDC forecasts cloud infrastructure spending to grow 8.3% compared to 2020 to $71.8 billion, while non-cloud infrastructure is expected to grow 1.9% to $58.4 billion after two years of declines.
Shared cloud infrastructure is expected to grow by 7.2% year over year to $49.7 billion for the full year. Spending on dedicated cloud infrastructure is expected to grow 10.7% to $22.2 billion for the full year.
Long term, IDC expects spending on compute and storage cloud infrastructure to have a compound annual growth rate (CAGR) of 12.4% over the 2020-2025 forecast period, reaching $118.8 billion in 2025 and accounting for 67.0% of total compute and storage infrastructure spend.
Shared cloud infrastructure will account for 70.9% of this amount, growing at a 12.7% CAGR. Spending on dedicated cloud infrastructure will grow at a CAGR of 11.5%.
Spending on non-cloud infrastructure will rebound in 2021 but will flatten out at a CAGR of 0.5%, reaching $58.6 billion in 2025.
Spending by service providers on compute and storage infrastructure is expected to grow at a 1.3% CAGR, reaching $115.4 billion in 2025.
