According to the International Data Corporation (IDC) Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment, spending on compute and storage infrastructure products for cloud deployments, including dedicated and shared IT environments, increased 18.5% year over year in the fourth quarter of 2023 (4Q23) to $31.8 billion. Spending on cloud infrastructure continues to outgrow the non-cloud segment with the latter growing 16.4% year over year in 4Q23 to $18.9 billion. The cloud infrastructure segment saw unit shipments decline 22.8% in the quarter with an increase in average selling prices (ASPs) mostly related to higher than usual GPU server shipments to hyperscalers.
"Cloud infrastructure spending continues to accelerate towards more robust configurations mainly fueled by the explosion of AI-related investments," said Juan Pablo Seminara, research director, Worldwide Enterprise Infrastructure Trackers at IDC. "Even though some caution remains on the socio-political side, the improvement in economic prospects contribute to a very positive spending outlook for 2024 and 2025 where cloud-based spending is expected to rebound at double-digit growth rates."
Spending on shared cloud infrastructure reached $22.8 billion in the quarter, increasing 27.0% compared to a year ago. The shared cloud infrastructure category continues to capture the largest share of spending compared to dedicated deployments and non-cloud spending. In 4Q23, shared cloud accounted for 44.9% of total infrastructure spending. The dedicated cloud infrastructure segment saw modest growth of 1.4% year over year in 4Q23 to $9.0 billion.
For 2024, IDC is forecasting cloud infrastructure spending to grow 19.3% compared to 2023 to $129.9 billion. Non-cloud infrastructure is expected to decline 1.4% to $57.6 billion. Shared cloud infrastructure is expected to grow 21.6% year over year to $95.3 billion for the full year while spending on dedicated cloud infrastructure is expected to have robust growth of 13.3% in 2024 to $34.6 billion for the full year. The subdued growth forecast for non-cloud infrastructure, which is forecast to decline 1.4% year over year in 2024, reflects the expectation that the market still faces some challenges. Cloud spending will remain very positive due to new and existing mission-critical workloads, which often require higher-end, performance-oriented systems.