Cloud computing spend grows again after slight dip

Global spending on cloud infrastructure returned to growth in Q3 2021 after the first quarterly decline since the pandemic triggered a massive increase in spending.

According to IDC researcher, spending on cloud infrastructure across dedicated and shared environments increased 6.6% year on year to $ 18.6 billion in Q3 2021. The growth put spending back on track with the seven consecutive quarters of growth since Q3 2019, with the exception of the 1.9% decline in Q2 2021.

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The main boost in cloud spending happened in Q2 2020, which saw 38.4% year-on-year growth.

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Cloud, whether dedicated or shared, is expected to continue to eat into traditional hardware spending in the future. The 2020 split on spending between ‘non-cloud & dedicated’, ‘cloud & shared’, and ‘cloud & dedicated’ infrastructure was 46.4%, 37.5%, and 16.2%.

IDC expects this order to be reversed by 2025: by then it expects spending on compute and storage cloud infrastructure to reach $ 118.8 billion and account for 67% of all compute and storage spend. Of that amount spent on cloud, shared infrastructure will dominate cloud spending with a 70.9% of that investment.

Cloud infrastructure spending in 2021 is likely to have grown 8.3% compared to 2020 to $ 71.8 billion, according to IDC projections. Meanwhile, spending on non-cloud IT infrastructure is expected to have grown just 1.9% in 2021 to $ 58.4 billion, which is actually a positive result after two years of decline.

Spending on shared cloud infrastructure should also have grown by 7.2% year over year to $ 49.7 billion for 2021, while dedicated cloud infrastructure spending is expected to have grown 10.7% to $ 22.2 billion for the full year.

IDC’s figures for cloud and non-cloud cover spending from several service provider types, including cloud service providers, digital service providers, communications service providers, and managed service providers. This group saw spending of $ 18.9 billion on compute and storage infrastructure, up 6.7% year on year, and accounted for 57% of all compute and storage infrastructure spending. IDC expects spending to reach $ 72.6 billion in 2021, up 7.4% from last year.

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Spending in the Asia / Pacific region, excluding Japan and China, grew fastest at 64.3% year on year in 3Q21, while the US saw the weakest growth at 1.1%.

Rival analyst Canalys estimated Q3 2021 spending on cloud infrastructure services reached almost $ 50 billion thanks to accelerated digital transformations. AWS leads with a 32% share of revenue, followed by Microsoft’s 21%, and Google’s 8%. However, Canalys warned that compute demand was outstripping chip manufacturing capabilities.

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