Spending on compute and storage infrastructure products for cloud deployments increased 16.3 percent in the fourth quarter of 2022 (4Q22) to $24.1 billion, according to IDC.
In Q4, spending on cloud infrastructure rose 9.4 percent to $18.7 billion. In 2022, spending on cloud infrastructure grew 19.4 percent to $87.7 billion, while non-cloud grew 13.6 percent to $66.7 billion. The market benefitted from high demand, large backlogs, rising prices, and an improving infrastructure supply chain.
Spending on shared cloud infrastructure increased 18.5 percent to $16.8 billion in the quarter. In 2022, spending on shared cloud infrastructure grew 20.1 percent to $61.5 billion.
IDC said demand for shared cloud infrastructure is expected to surpass non-cloud infrastructure in spending in 2023. The dedicated cloud infrastructure segment grew 11.5 percent in 4Q22 to $7.2 billion, and 18.0 percent in 2022 to $26.2 billion. Of the total dedicated cloud infrastructure, 45.5 percent was deployed on customer premises during the quarter, and 45.2 percent for the full year.
For 2023, cloud infrastructure spending is forecast to grow 6.9 percent to $93.7 billion – a significant decrease from the 19.4 percent annual growth in 2022. Non-cloud infrastructure in 2023 is expected to decline 10.3 percent to $59.8 billion. Shared cloud infrastructure is expected to grow 7.5 percent year over year to $66.1 billion in 2023, while spending on dedicated cloud infrastructure is expected to grow 5.4 percent to $27.6 billion in 2023.
Q4 spending on compute and storage infrastructure by service provider category — including cloud service providers, digital service providers, communications service providers, and managed service providers – rose 16 percent to $24.1 billion. This spending accounted for 56.3 percent of the total market.
Q4 spending on compute and storage infrastructure by non-service providers (enterprises, government, etc.) rose 9.7 percent.
For 2022, service providers spent on compute and storage infrastructure $87.9 billion, up 18 percent, and accounting for 56.9 percent of total compute and storage spending for the year. Non-service providers spending on compute and storage infrastructure grew 15.4 percent to $66.4 billion. IDC expects compute and storage spending by service providers to reach $92.3 billion in 2023, growing at 5.1 percent year over year.
IDC predicts spending on cloud infrastructure to have a compound annual growth rate (CAGR) of 10.5 percent over the 2022-2027 forecast period, reaching $144.3 billion in 2027 and accounting for 67.6 percent of total compute and storage infrastructure spend.
Shared cloud infrastructure will account for 71.7 percent of the total cloud amount, growing at a 11.0 percent CAGR and reaching $103.5 billion in 2027.
Spending on dedicated cloud infrastructure will grow at a CAGR of 9.3 percent to $40.7 billion. Spending on non-cloud infrastructure will grow at a CAGR of 0.7 percent, reaching $69.0 billion in 2027. Spending by service providers on compute and storage infrastructure is expected to grow at a 10.0 percent CAGR, reaching $141.3 billion in 2027.