Industry Shift: IDC Announces Overall Transition to Cloud-Based IT Solutions

On June 30, 2022, the International Data Corporation (“IDC”) issued a press release announcing that in the first quarter (“Q122”) “spending on compute and storage infrastructure products for cloud deployments, including dedicated and shared environments, increased 17.2% year over year in the first quarter of 2022 (1Q22) to $18.3 billion.”

According to IDC, this was the first time that companies spent more money on cloud-based compute and storage infrastructure for their organization than they spent on non-cloud based information technology (“IT”) infrastructure. This increase reportedly occurred across most regions, including a double digit increase in spending for Japan, Middle East and Africa, China, and the United States and a 6.4% increase in Western Europe.

Additionally, the IDC forecasted that spending on cloud-based compute and storage infrastructure would incur an overall increase 22% for 2022 compared to 2021, with the overall spending projected to amount to $90.2 billion.

There are several factors which can affect a company’s infrastructure spending. In fact, IDC attributes the 10.3% decrease in cloud infrastructure spending in 1Q22 in Central & Eastern Europe to the fact that they were being “affected by the war between Russia and Ukraine” at the end of the quarter. Whatever the reason, IDC predicts a continuous increase in compute and storage cloud infrastructure spending over the next several years. In fact the IDC predicts “spending on compute and storage cloud infrastructure to have a compound annual growth rate (CAGR) of 14.5% over the 2021-2026 forecast period, reaching $145.2 billion in 2026 and accounting for 69.7% of total compute and storage infrastructure spend.”