According to a report from International Data Corporation, spending on compute and storage infrastructure products for cloud deployments, including dedicated and shared IT environments, increased 24.7% year over year in Q3/22 to $23.9 billion. Spending on cloud infrastructure continued to outgrow the non-cloud segment, although the latter had strong growth in Q3/22 as well, increasing 16.5% year over year to $16.8 billion. According to IDC, the market continues to benefit from high demand and large backlogs, coupled with an improving infrastructure supply chain.

Spending on shared cloud infrastructure reached $16.8 billion in the quarter, increasing 24.4% compared to a year ago. IDC expects to see continuous strong demand for shared cloud infrastructure, with spending expected to surpass non-cloud infrastructure spending in 2023. The dedicated cloud infrastructure segment grew 25.3% year over year in Q3/22 to $7.1 billion. Of the total dedicated cloud infrastructure, 45.2% was deployed on customer premises.

IDC tracks various categories of service providers and how much compute and storage infrastructure these service providers purchase, including both cloud and non-cloud infrastructure. The service provider category includes cloud service providers, digital service providers, communications service providers and managed service providers. In Q3/22, service providers as a group spent $23.9 billion on compute and storage infrastructure, up 22.5% from the prior year. This spending accounted for 58.7% of the total market. Non-service providers (e.g., enterprises, government, etc.) increased their spending at a similarly high rate of 19.3% year over year. IDC expects compute and storage spending by service providers to reach $87.8 billion in 2022, growing 17.5% year over year.

On a geographic basis, year-over-year spending on cloud infrastructure in Q3/22 increased in all regions except Central and Eastern Europe (CEE), which was impacted by the Russia-Ukraine war. Spending in CEE declined 35.1% year over year in the quarter. The Middle East and Africa (MEA), the United States and Western Europe grew the most at 65.8%, 32.1% and 31.3% year over year, respectively. All other regions demonstrated growth between 10% and 30%.

Long term, IDC predicts spending on cloud infrastructure to have a compound annual growth rate (CAGR) of 12.9% through 2026, reaching $135.1 billion in 2026 and accounting for 67.3% of total compute and storage infrastructure spend. Shared cloud infrastructure will account for 72.3% of the total cloud amount, growing at a 13.8% CAGR. Spending on dedicated cloud infrastructure will grow at a CAGR of 10.7% to $37.4 billion. Spending on non-cloud infrastructure will have a CAGR of 2.3%, reaching $65.6 billion in 2026. Spending by service providers on compute and storage infrastructure is expected to grow at a CAGR of 12.1%, reaching $131.9 billion in 2026.