Enterprises spend $7.2 bn in compute and storage in H2 2023: IDC

Enterprises have spent $7.2 billion into compute and storage hardware infrastructure to bolster their operations in the second half of 2023, constituting 7.8 percent of the total enterprise IT infrastructure spending, IDC report said.
enterprise IT infrastructure spending

Structured Databases and Data Management emerged as one of the few workloads witnessing a decline, with spending dipping by 1.3 percent compared to the corresponding period in 2022. Industry-Specific Business Applications experienced the most rapid spending surge, with a remarkable year-over-year increase of 36.6 percent in 2H23.

AI Lifecycle workloads also saw substantial growth, with spending soaring by 26.6 percent in the latter half of 2023 compared to the same period in 2022, accounting for 7.2 percent of the total expenditure. This propelled AI Lifecycle to the second-largest workload category, with spending reaching $6.6 billion.

Client Computing rebounded strongly, registering a growth of 22.6 percent compared to 2H22. Additionally, Development Tools and Applications, Text and Media Analytics, Business Intelligence and Data Analytics, and Engineering and Technical workloads all experienced double-digit growth, with spending surging by 17.8 percent, 16.6 percent, 15.3 percent, and 11.4 percent, respectively, in 2H23.

The spending profiles across product categories varied significantly. For ODM Direct, Consumer-Oriented Digital Services emerged as the top spender, accounting for $2.8 billion in 2H23, representing 10.6 percent of ODM spending.

In contrast, for OEM Servers, AI Lifecycle took the lead with $3.9 billion and a 7.6 percent share. For OEM Storage, Structured Databases and Data Management dominated, constituting 16.6 percent of the spending with a value of $2.4 billion.

Geographically, spending priorities also diverged. In the Americas, AI Lifecycle workloads claimed the highest spending position in 2H23, reaching $3.1 billion. Conversely, in Asia/Pacific (excluding Japan and China), China, and Europe, the Middle East, and Africa (EMEA), Structured Databases and Data Management witnessed the largest spending, amounting to $1.1 billion, $2.3 billion, and $0.99 billion, respectively, in 2H23.

As enterprise workloads increasingly migrate to cloud environments, investments in shared infrastructure and dedicated infrastructure across all workloads are expected to surge at a double-digit pace over the next five years.

Spending for workloads in cloud and shared infrastructure environments is projected to witness a five-year compound annual growth rate (CAGR) of 12.8 percent, with Digital Services and AI Lifecycle leading the way.

IDC predicts that spending for Digital Services and AI Lifecycle in cloud and shared environments will reach $16.5 billion and $11.6 billion, respectively, by 2028, both with a five-year CAGR of 15 percent.

Moreover, infrastructure spending in cloud and dedicated environments is anticipated to see a 12.9 percent CAGR, with Structured Databases and Data Management, followed by AI Lifecycle, emerging as the fastest-growing workloads, with five-year CAGRs of 8.8 percent and 18.8 percent, respectively. AI Lifecycle is expected to remain the second-largest category for spending, reaching $4.9 billion by 2028.

However, over the next five years, IDC predicts that growth in compute and storage systems spending for cloud-native workloads will outpace infrastructure supporting traditional workloads (14.0 percent vs. 8.4 percent CAGR), though traditional workloads will continue to dominate the spending landscape, accounting for 67 percent of total expenditure by 2028.

Meanwhile, spending for workloads in non-cloud infrastructure environments is forecasted to grow at a 4.1 percent CAGR over the next five years, with Unstructured Databases, Text and Media Analytics, and AI Lifecycle emerging as the fastest-growing categories, with five-year CAGRs of 12.8 percent, 11.8 percent, and 9.0 percent, respectively.

Nevertheless, Structured Databases and Data Management, Content Applications, and Business Intelligence and Data Analytics are expected to collectively account for 24 percent of spending by 2028, while Unstructured Databases, Text and Media Analytics, and AI Lifecycle combined will only constitute 15 percent of spending in the same period.

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