Cloud computing spending is growing again and more to come

Companies around the world spent $21.1 billion on cloud infrastructure services in the fourth quarter (Q4) of 2021, signaling an uptick in cloud storage and compute spending.

Cloud infrastructure spending rose 13.5% year-over-year in the quarter to $21.1 billion, according to technology research firm IDC.

In the previous quarter, cloud infrastructure spending was $18.6 billion after a notable year-over-year decline of 1.9% in the second quarter of 2021, marking the first time cloud spending fell in seven quarters.

Cloud spending rose as businesses and governments around the world embarked on major digital transformation projects over the past two years. The big winners are the big three cloud players: Amazon Web Services (AWS), Google Cloud and Microsoft with Azure and its other cloud services, such as Office 365.

“This was the second consecutive quarter of year-on-year growth as supply chain constraints have depleted supplier inventories in recent quarters. As backlogs continue to grow, pent-up demand bodes well for future growth as long as the economy remains healthy, and supply is catching up with demand,” IDC said of the fourth quarter of 2021.

For all of 2021, cloud spending was 8.8% higher than in 2020, totaling $73.9 billion for the year.

Business spending on traditional IT also grew, but not as fast as cloud spending. Enterprise invested in non-cloud infrastructure at $17.2 billion, up 1.5% year over year in 4Q21, according to IDC. It marks the fourth consecutive quarter of growth in traditional IT spending, which grew 4.2% in 2020 to $59.6 billion for the year.

Cloud giants try to gain an edge over each other in all sorts of ways. Last week, a Google Cloud poll found that government officials were concerned that reliance on Microsoft’s products was undermining government cybersecurity: Microsoft disagreed.

IDC predicts that companies will spend $90.0 billion on cloud infrastructure by 2022, an increase of 21.7% from 2021. The biggest loser is traditional IT spending for organizations that maintain their own infrastructure. CIOs spending on non-cloud infrastructure should fall 0.3% to $59.4 billion.

However, IDC estimates that shared cloud infrastructure spending will grow 25.5% year over year to $64.5 billion in 2022, while dedicated cloud infrastructure spending is expected to grow 13.1% to $25.4 billion in 2017. 2022.


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