Most Enterprise Software Engineers Will Use AI Assistants by 2028
By 2028, 75% of enterprise software engineers will use AI code assistants, up from less than 10% in early 2023, according to Gartner.
According to an IDC study, spending on computing and storage infrastructure products for cloud deployments, including dedicated and shared IT environments, increased 18.5% year over year in the fourth quarter of 2023 to $31.8 billion. Spending on cloud infrastructure continues to outgrow the non-cloud segment with the latter growing 16.4% year over year in 4Q23 to $18.9 billion. The cloud infrastructure segment saw unit shipments decline 22.8% in the quarter with an increase in average selling prices (ASPs) mostly related to higher-than-usual GPU server shipments to hyperscalers.
"Cloud infrastructure spending continues to accelerate towards more robust configurations mainly fueled by the explosion of AI-related investments," said Juan Pablo Seminara, research director for Worldwide Enterprise Infrastructure Trackers at IDC. "Even though some caution remains on the socio-political side, the improvement in economic prospects contribute to a very positive spending outlook for 2024 and 2025 where cloud-based spending is expected to rebound at double-digit growth rates."
Spending on shared cloud infrastructure reached $22.8 billion in the quarter, increasing 27.0% compared to a year ago. The shared cloud infrastructure category continues to capture the largest share of spending compared to dedicated deployments and non-cloud spending. In 4Q23, shared cloud accounted for 44.9% of total infrastructure spending. The dedicated cloud infrastructure segment saw modest growth of 1.4% to $9.0 billion.
For 2024, IDC is forecasting cloud infrastructure spending to grow 19.3% compared to 2023 to $129.9 billion. Non-cloud infrastructure is expected to decline 1.4% to $57.6 billion. Shared cloud infrastructure is expected to grow 21.6% year over year to $95.3 billion for the full year while spending on dedicated cloud infrastructure is expected to have robust growth of 13.3% in 2024 to $34.6 billion for the full year. The subdued growth forecast for non-cloud infrastructure, which is forecast to decline 1.4% year over year in 2024, reflects the expectation that the market still faces some challenges. Cloud spending will remain very positive due to new and existing mission-critical workloads, which often require higher-end, performance-oriented systems.
IDC's service provider category includes cloud service providers, digital service providers, communications service providers, hyperscalers, and managed service providers. In 4Q23, service providers as a group spent $30.0 billion on compute and storage infrastructure, up 19.6% from the prior year. This spending accounted for 59.2% of the total market. Non-service providers also increased their spending to $20.7 billion, growing 15.2% year over year. IDC expects computing and storage spending by service providers to reach $124.3 billion in 2024, growing 21.8% year over year.
On a geographic basis, spending on cloud infrastructure in 4Q23 showed mixed results, with China, the Middle East, and Canada showing negative growth led by China with a decline of 31.1%, mainly affected by an economy still under pressure in the fourth quarter of 2023. The regions with increased spending in 4Q23 were Asia/Pacific (excluding Japan and China), the United States, Central & Eastern Europe, Japan, Western Europe, and Latin America, where cloud spending grew at 48.2%, 40,6%, 11.3%, 10.5%, 2.7%, and 1.5% year over year, respectively. Most of this growth was related to large high-performance computing and AI-based projects.
Long term, IDC predicts spending on cloud infrastructure to have a compound annual growth rate (CAGR) of 12.8% over the 2023-2028 forecast period, reaching $199.1 billion in 2028 and accounting for 73.6% of total compute and storage infrastructure spend. Shared cloud infrastructure spending will account for 71.8% of the total cloud spending in 2028, growing at a 12.8% CAGR and reaching $143.0 billion. Spending on dedicated cloud infrastructure will grow at a CAGR of 12.9% to $56.1 billion. Spending on non-cloud infrastructure will also rebound with a 4.1% CAGR, reaching $71.4 billion in 2028. Spending by service providers on compute and storage infrastructure is expected to grow at a 13.1% CAGR, reaching $188.5 billion in 2028.