Spending on cloud infrastructure continues to outgrow the non-cloud segment with the latter growing by 5.7% in 1Q24 to $13.9 billion.
According to the International Data Corporation (IDC) Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment, spending on compute and storage infrastructure products for cloud deployments, including dedicated and shared IT environments, increased 36.9% year over year in the first quarter of 2024 (1Q24) to $33.0 billion. Spending on cloud infrastructure continues to outgrow the non-cloud segment with the latter growing by 5.7% in 1Q24 to $13.9 billion. The cloud infrastructure segment experienced slower growth in unit demand of 11.4%, due to the continued increase in average selling prices (ASPs) mostly related to higher than usual GPU server shipments.
"Cloud infrastructure spending growth continues being driven by the explosion of AI-related investments, which not only impact servers but also started to have positive influence on enterprise storage as well," said Juan Pablo Seminara, research director for IDC's Worldwide Enterprise Infrastructure Tracker. "Even though some caution still remains on the socio-political side, it has become clear that AI investment plans are not slowing down in 2024 and will continue growing at a high rate this year and beyond. Additionally, the improvement on economic prospects contributes to a very positive spending outlook for 2024 and 2025 where cloud-based spending will increase at double-digit pace."
Spending on shared (public) cloud infrastructure reached $26.3 billion in the quarter, increasing 43.9% compared to a year ago. The shared cloud infrastructure category continues to hold the largest share of spending compared to dedicated (private) cloud deployments and non-cloud spending. In 1Q24, shared cloud accounted for 56.1% of total infrastructure spending. The dedicated cloud infrastructure segment saw lower growth of 15.3% year over year in 1Q24 to $6.7 billion.
For 2024, IDC is forecasting cloud infrastructure spending will grow 26.1% compared to 2023 to $138.3 billion. Non-cloud infrastructure is forecast to grow 8.4% to $64.8 billion. Shared cloud infrastructure is expected to grow 30.4% year over year to $108.3 billion for the full year. Spending on dedicated cloud infrastructure is also expected to have double-digit growth in 2024 at 12.8% reaching $30.0 billion for the full year. The subdued growth forecast for non-cloud infrastructure at 8.4% in 2024 reflects that even though most of the growth will come from cloud spending, general non-cloud dedicated systems are set to recover this year.
IDC's service provider category includes cloud service providers, digital service providers, communications service providers, hyperscalers, and managed service providers. In 1Q24, service providers as a group spent $32.2 billion on compute and storage infrastructure, up 37.9% from the prior year. This spending accounted for 68.7% of the total market. Non-service providers (e.g., enterprises, government, etc.) also increased their spending to $14.7 billion growing 5.8% year over year. IDC expects compute and storage spending by service providers to reach $132.2 billion in 2024, growing at 26.2% year over year.
