Enterprises Spend $6.4 bn in compute and storage for Data Management Workloads

Enterprises have invested a whopping $6.4 billion in compute and storage hardware infrastructure to support Structured Databases and Data Management workloads, constituting 8.5 percent of the market total.
Forecast on enterprise infrastructure workloadsStructured Databases and Data Management workloads are driving the largest share of enterprise IT infrastructure spending in the first half of 2023, according to the International Data Corporation (IDC) Worldwide Semiannual Enterprise Infrastructure Tracker: Workloads.

Though this category commanded a significant portion of the budget, it didn’t experience the most substantial growth, with only a modest 1.1 percent annual increase.

In stark contrast, Industry Specific Business Applications witnessed a remarkable growth of 33.3 percent compared to the same period in 2022.

HR/Human Capital Management (HCM), Business Intelligence/Data Analytics, and Development Tools and Applications also saw impressive double-digit year-over-year growth in hardware infrastructure demand, with respective spending increases of 28.5 percent, 10.4 percent, and 10.3 percent.

Notably, only Business Intelligence/Data Analytics secured a position among the top five workloads in hardware spending, while HR/Human Capital Management (HCM) and Development Tools and Applications ranked 15th and 10th in terms of spending.

The allocation of spending profiles varies across different product categories. ODM Direct’s highest spending in the first half of 2023 was directed towards Digital Services, amounting to $2.6 billion, representing 11.7 percent of ODM spending. On the other hand, OEM Servers and OEM Storage spending were dominated by Structured Databases and Data Management.

Regional variations in workload priorities were also evident, with Asia/Pacific’s spending on AI Lifecycle in the first half of 2023 reaching $2.0 billion, trailing closely behind Structured Databases and Data Management.

In Europe, the Middle East, and Africa (EMEA), infrastructure spending was the second-largest workload category at $0.9 billion. In the Americas, Digital Services led the way with a spending of $2.8 billion, where ODMs accounted for 46 percent of the total infrastructure expenditure for the first half of the year.

As enterprise workloads continue their migration to the public cloud, investments in shared infrastructure, the hardware foundation for delivering public cloud services, are projected to grow at a compound annual growth rate (CAGR) of 11.6 percent over the next five years.

Digital Services and AI Lifecycle spending are expected to lead this charge, with IDC forecasting spending for Digital Services to reach $13.4 billion in 2027 and AI Lifecycle to hit $8.1 billion, both with five-year CAGRs of 15 percent.

Infrastructure spending for cloud and dedicated environments is expected to grow at a 10.7 percent CAGR over the same period, with AI Lifecycle emerging as the fastest-growing workload, boasting a five-year CAGR of 16.3 percent. By 2027, IDC predicts that AI Lifecycle will become the second-largest workloads category in terms of spending, amounting to $3.9 billion.

Over the next five years, IDC foresees that growth in spending for compute and storage systems for cloud-native workloads will outpace that of infrastructure supporting traditional workloads, with CAGRs of 12.2 percent and 6.2 percent respectively. Traditional workloads will continue to dominate the majority of spending, accounting for 71 percent in 2027.

Lastly, spending for workloads in non-cloud infrastructure environments is projected to grow at a 1.7 percent CAGR over the next five years. Among these, Text and Media Analytics and AI Lifecycle are set to be the fastest-growing workloads, with respective five-year CAGRs of 9 percent and 6.1 percent.

Structured Database/Data Management, Content Applications, and Business Intelligence/Data Analytics combined will contribute to 24 percent of spending in 2027, while Text and Media Analytics and AI Lifecycle combined will represent 11.3 percent of spending in the same year.

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