Spending on Compute and Storage Infrastructure Grew Strongly in 1Q22

Spending on compute and storage infrastructure products for cloud deployments, including dedicated and shared environments, increased 17.2% year over year in the first quarter of 2022 (1Q22) to $18.3 billion, according to IDC. This growth continues a series of strong year-over-year increases in spending on infrastructure products by both service providers and enterprises despite the tight supply of some system components and disruptions in transportation networks. Investments in non-cloud infrastructure increased 9.8% year over year in 1Q22 to $14.8 billion, continuing a streak of growth for this segment into its fifth quarter.

Spending on shared cloud infrastructure reached $12.5 billion in the quarter, increasing 15.7% compared to a year ago. IDC expects to see continuously strong demand for shared cloud infrastructure with spending expected to surpass non-cloud infrastructure spending in 2022 for the first time. Spending on dedicated cloud infrastructure increased 20.5% year over year in 1Q22 to $5.9 billion. Of the total dedicated cloud infrastructure, 47.8% was deployed on customer premises.

For the full year 2022, IDC is forecasting cloud infrastructure spending to grow 22% compared to 2021 to $90.2 billion – the highest annual growth rate since 2018 – while non-cloud infrastructure is expected to grow 1.8% to $60.7 billion. The increased forecast for both segments is partially driven by inflationary pressure and expectations of higher systems prices during 2022 as well as improvements in the supply chain in the second half of the year. Shared cloud infrastructure is expected to grow by 24.3% year over year to $63.9 billion for the full year. Spending on dedicated cloud infrastructure is expected to grow 16.8% to $26.3 billion for the full year.

As part of the Tracker, IDC follows various categories of service providers and how much compute and storage infrastructure these service providers purchase, including both cloud and non-cloud infrastructure. The service provider category includes cloud service providers, digital service providers, communications service providers, and managed service providers. In 1Q22, service providers as a group spent $18.3 billion on compute and storage infrastructure, up 14.5% from 1Q21. This spending accounted for 55.3% of total compute and storage infrastructure spending. Spending by non-service providers increased 12.9% year over year, the highest growth in fourteen quarters. IDC expects the compute and storage spending by service providers to reach $89.1 billion in 2022, growing 18.7% year over year.

Long term, IDC expects spending on compute and storage cloud infrastructure to have a compound annual growth rate (CAGR) of 14.5% over the 2021-2026 forecast period, reaching $145.2 billion in 2026 and accounting for 69.7% of total compute and storage infrastructure spend. Shared cloud infrastructure will account for 72.6% of the total cloud amount, growing at a 15.4% CAGR. Spending on dedicated cloud infrastructure will grow at a CAGR of 12.1%. Spending on non-cloud infrastructure will grow at 1.2% CAGR, reaching $63.1 billion in 2026. Spending by service providers on compute and storage infrastructure is expected to grow at a 13.4% CAGR, reaching $140.8 billion in 2026.



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