IDC: Cloud Infrastructure Spending Decreased in Q2 But Is on Track for Growth

According to a recent IDC report, spending on compute and storage infrastructure products for cloud infrastructure decreased 2.4% year over year in the second quarter to $16.8 billion. This decrease comes after six quarters of year-over-year growth, and most notably compares to the 39.1% annual growth seen by the market in 2Q20, when the world just entered the pandemic with the first wave of business and country closures causing a spike in investments in cloud services and infrastructure. Investments in non-cloud infrastructure increased 3.4% year over year in 2Q21 to $13.4 billion recovering from a 7.2% decline in 2Q20.

Spending on shared cloud infrastructure reached $11.9 billion, a decrease of 6.1% compared to 2Q20, and a 17% increase from 1Q21. Weakness in year-over-year demand from public cloud service providers comes after an exceptionally strong 2Q20, in which spending increased 55.5% driven by the spike in demand for cloud services in the first months of the pandemic.

Despite weakness in 2Q21, IDC is forecasting cloud infrastructure spending to grow 12% to $74.3 billion for 2021, while non-cloud infrastructure is expected to grow 2.7% to $58.9 billion after two years of declines. Shared cloud infrastructure is expected to grow by 11.1% year over year to $51.4 billion for the full year. Spending on dedicated cloud infrastructure is expected to grow 14.1% to $22.8 billion for the full year.

IDC’s Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment is designed to provide clients with a better understanding of what portion of the compute and storage hardware markets are being deployed in cloud environments.

Channel Impact^®
The report underscores the opportunity for channel partners to offer better protection to their customers at a time when Zero Trust security architectures are gaining momentum.