Cloud Infrastructure Spending to Surge 19% in 2024, IDC Forecasts

In its latest forecast for 2024, the International Data Corporation (IDC) anticipates significant growth in cloud infrastructure spending.
Q4 2023 Spending on Cloud InfrastructureAccording to IDC’s projections, cloud infrastructure spending is set to soar by 19.3 percent compared to 2023, reaching $129.9 billion. In contrast, non-cloud infrastructure expenditure is expected to dip by 1.4 percent to $57.6 billion in 2024.

The growth in cloud infrastructure spending is driven by several factors, including the rising demand for shared cloud infrastructure, which is projected to grow by 21.6 percent to $95.3 billion.

Additionally, investment in dedicated cloud infrastructure is forecasted to experience growth of 13.3 percent in 2024, reaching $34.6 billion for the full year, the IDC report said.

Juan Pablo Seminara, research director at IDC, attributes the acceleration in cloud infrastructure spending to the proliferation of AI-related investments and improving economic prospects. Despite lingering socio-political uncertainties, businesses are increasingly adopting cloud solutions to cater to evolving mission-critical workloads, necessitating high-end, performance-oriented systems.

IDC’s Worldwide Quarterly Enterprise Infrastructure Tracker reveals that spending on compute and storage infrastructure products for cloud deployments surged by 18.5 percent in the fourth quarter of 2023, totaling $31.8 billion. Non-cloud segments have grown by 16.4 percent in the same period.

Moreover, the report highlights a shift towards more robust configurations in cloud infrastructure, driven primarily by the rapid expansion of AI-related investments. Shared cloud infrastructure, in particular, captured the largest share of spending compared to dedicated deployments and non-cloud spending, accounting for 44.9 percent of total infrastructure spending in the fourth quarter of 2023.

Geographically, the outlook for cloud infrastructure spending in the fourth quarter of 2023 varied, with regions like Asia/Pacific (excluding Japan and China) and the United States witnessing significant growth, while others experienced declines. Despite this mixed performance, IDC projects a compound annual growth rate (CAGR) of 12.8 percent for cloud infrastructure spending over the 2023-2028 period, reaching $199.1 billion in 2028.

Shared cloud infrastructure spending is expected to dominate, accounting for 71.8 percent of total cloud spending by 2028, with a CAGR of 12.8 percent and reaching $143.0 billion.

Meanwhile, spending on dedicated cloud infrastructure is forecasted to grow at a CAGR of 12.9 percent to $56.1 billion by 2028. Overall, the data underscores the ongoing momentum towards cloud adoption in the business landscape, driven by the imperative for scalable, agile, and cost-effective solutions, IDC said.

InfotechLead.com News Desk

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