Technology

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 researcher IDC, 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 in 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 expect 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 U.S. 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 revenues, followed by Microsoft’s 21%, and Google’s 8%. However, Canalys warned that compute demand was outstripping chip manufacturing capabilities. 



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