According to a report by International Data Corporation (IDC), spending on compute and storage infrastructure products for cloud deployments, including dedicated and shared IT environments, increased 115.3 per cent year-on-year (YoY) in the third quarter (Q3) of 2024-25 to $57.3 billion. Spending on cloud infrastructure continues to outgrow the non-cloud segment with the latter growing by 28.6 per cent in Q3 2024-25 to $19.6 billion. The cloud infrastructure segment experienced a lower growth in unit demand of 15.6 per cent, due to a continued increase in average selling price (ASPs) mostly related to the exponential increase of graphics processing unit (GPU) server shipments.
The report mentioned that spending on shared cloud infrastructure reached $47.9 billion in the quarter, increasing 136.5 per cent YoY. The shared cloud infrastructure category continues capturing the largest share of spending compared to dedicated deployments and non-cloud spending, in Q3 2024-25 shared cloud accounted for 62.4 per cent of the total infrastructure spending. The dedicated cloud infrastructure segment presented lower growth of 47.6 per cent YoY in Q3 2024-25 to $9.3 billion.
Meanwhile, the report highlighted that for 2024-25, IDC is forecasting cloud infrastructure spending to grow 74.3 per cent compared to 2023 to $192.0 billion. Non-cloud infrastructure is expected to grow 17.9 per cent to $71.4 billion. Shared cloud infrastructure is expected to grow 88.9 per cent YoY to $157.8 billion for the full year, spending on dedicated cloud infrastructure is also expected to have a double-digit growth in 2024-25 with 28.6 per cent to $34.2 billion for the full year. The subdued growth forecast for non-cloud infrastructure at 17.9 per cent in 2024-25 reflects that even though most of the growth will come from cloud spending, general non-cloud dedicated systems are consolidating the recovery this year.
Further, IDC’s service provider category includes cloud service providers, digital service providers, communications service providers, hyperscaler, and managed service providers. In Q3 2024-25, service providers as a group spent $54.2 billion on compute and storage infrastructure, up 113.8 per cent YoY. This spending accounted for 70.6 per cent of the total market. Non-service providers (for example, enterprises, government, etc.) also increased their spending to $22.6 billion growing 37.5 per cent YoY. IDC expects compute and storage spending by service providers to reach $183.1 billion in 2024-25, growing at 73.5 per cent YoY.
As per the report, on a geographic basis, YoY spending on cloud infrastructure in Q3 2024-25 showed very positive results across all regions where the fastest growing regions were USA and China showing triple digit growth of 148.3 per cent and 100 per cent each, the regions showed double digit growth were APeJC, Japan, Western Europe, Canada and Latin America with 90.3 per cent, 73.5 per cent, 40.1 per cent, 38.5 per cent and 34.8 per cent, respectively. While Middle East and Africa showed digit growth of 6.7 per cent, Central and Eastern Europe was the only one declining at -1.7 per cent.
The report predicted that spending on cloud infrastructure to have a compound annual growth rate (CAGR) of 24.2 per cent over the 2023-2028 forecast period, reaching $325.5 billion in 2028 and accounting for 78.8 per cent of total compute and storage infrastructure spend. Shared cloud infrastructure spending will account for 79.1 per cent of the total cloud spending in 2028, growing at a 25.2 per cent CAGR and reaching $257.4 billion. Spending on dedicated cloud infrastructure will grow at a CAGR of 20.7 per cent to $68.2 billion. Spending on non-cloud infrastructure will also rebound with a 7.6 per cent CAGR, reaching $87.5 billion in 2028. Spending by service providers on compute and storage infrastructure is expected to grow at a 17.1 per cent CAGR, reaching $233.0 billion in 2028.
Commenting on the report, Juan Pablo Seminara, director, Worldwide Enterprise Infrastructure Trackers, IDC, said, “Cloud infrastructure spending growth continues being driven by accelerated servers related investments that not only aim to cover artificial intelligence (AI) initiatives but also support large high-performance computing (HPC) projects that were unveiling recently. After a year where the demand was focus on serve infrastructure build-up for AI model development and training, we will start to see more investments oriented to AI model inferencing that will shift demand towards less dense GPU based platforms, that of course will continue be demanded throughout 2025 and beyond but with a less aggressive pace than last year.”
