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Enterprises spent big on cloud infrastructure — $15.1 billion — in the first quarter of 2021, the International Data Corporation (IDC) said in its latest tracker. Specifically, spending on compute and storage infrastructure products for cloud infrastructure, including dedicated and shared environments, increased 12.5% year over year, compared to 6.3% year over year increase for non-cloud infrastructure. Global spending for non-cloud infrastructure was $13.5 billion in the first quarter of 2021.
IDC tracks various categories of service providers as part of its Quarterly Infrastructure Tracker. The Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment, released Thursday, provides a better understanding of what portion of the compute and storage hardware markets are being deployed in cloud environments. The market research firm also named the top vendors of cloud infrastructure technologies worldwide, breaking them down by revenue, market share, and revenue growth between first quarter 2020 and first quarter 2021.
The past year of pandemic-related lockdowns and restrictions left a lasting impact on IT infrastructure — the increased reliance on cloud platforms for delivering commercial, educational, and social applications, IDC said in its tracker. The intensified focus among organizations on business continuity and risk management, will likely drive more digital transformation initiatives and increase adoption of of as-a-service delivery models, according to IDC.
Shift away from non-cloud infrastructure
IDC analyzed spending on both dedicated and shared cloud infrastructure. Global spending on shared cloud infrastructure increased 11.6% over the same time period last year, reaching $10.3 billion, while spending on dedicated cloud infrastructure increased 14.7% to $4.8 billion. Overall, IDC expects expects shared cloud infrastructure spending to eventually surpass non-cloud infrastructure spending in the near future.
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Combined with a surge in cloud interest from the pandemic, the healthy first quarter results led IDC to forecast significant growth for the technology throughout the remainder of the year. For all of 2021, IDC is forecasting cloud infrastructure spending to grow 12.9% to $74.6 billion, while expecting non-cloud infrastructure spending to rise by only 2.7% to $58.5 billion. This, of course, follows two years of declines on the non-cloud side.
Long-term, IDC expects spending on compute and storage cloud infrastructure to have a compound annual growth rate (CAGR) of 11.3% over the 2021-2025 forecast period, reaching $112.9 billion in 2025 and accounting for 66.1% of total compute and storage infrastructure spend. Shared cloud infrastructure will account for 67.5% of this amount, growing at a 10.5% CAGR. Spending on dedicated cloud infrastructure will grow at a CAGR of 13.1%. Spending on non-cloud infrastructure will rebound slightly in 2021 but will flatten out at a CAGR of 0.3%, reaching $57.9 billion in 2025. Spending by service providers on compute and storage infrastructure is expected to grow at a 10.1% CAGR, reaching $108.8 billion in 2025.
Who are the cloud infrastructure leaders?
Spending on cloud infrastructure increased almost universally across different regions in the first quarter of this year. Canada, China, and Asia/Pacific (excluding Japan and China) saw the highest annual growth rates at 40.3%, 35.0%, and 28.8%, respectively. Western Europe grew 10.8% and the U.S. grew 4.5%. Cloud infrastructure spending in Japan, in contrast, declined slightly by 1.1%.
All major vendors grew their cloud infrastructure revenue in 1Q21, with Lenovo (38.2%) and Huawei (37.9%) making the most significant gains, as well as HPE/H3C (combined due to the nature of their existing join venture) with 18.2%.
Despite the impressive growth for some companies, Dell Technologies still maintained its revenue and marketshare lead by a significant margin, despite only experiencing a 1.9% revenue growth. This was the smallest gain of the all tracked vendors, but plenty for Dell to stay on top. While IDC reports $994 million and $460 million in revenue for Lenovo and Huawei, respectively, Dell brought in nearly $2.5 billion.
IDC’s analysis comes a few days after market research firm Gartner released new data on the infrastructure-as-a-service public cloud services market. Amazon remains the market leader in IaaS, with about 41% market share, followed by Microsoft, Alibaba, Google, and Huawei, Gartner said. Microsoft’s growth was driven by interest among Microsoft Azure customers “to migrate mission-critical workloads, such as from healthcare applications with AI-assisted bots, digital twins in manufacturing and e-commerce in retail,” Gartner said.
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