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Cloud Infrastructure Spending Maintained Strong Growth in First Quarter of 2021, According to IDC

July 1, 2021 GMT

NEEDHAM, Mass.--(BUSINESS WIRE)--Jul 1, 2021--

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 infrastructure, including dedicated and shared environments, increased 12.5% year over year in the first quarter of 2021 (1Q21) to $15.1 billion. Investments in non-cloud infrastructure increased 6.3% year over year in 1Q21 to $13.5 billion.

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As the market and the world slowly begins to emerge from the COVID-19 pandemic, sectors of the economy that had suffered the most revenue loss are returning to growth. A lasting impact on IT infrastructure will be an increased reliance on cloud platforms for delivering commercial, educational, and social applications, as well as an intensified focus among organizations on business continuity and risk management, helping to drive digital transformation initiatives and increase usage of as-a-service delivery models.

Spending on shared cloud infrastructure increased 11.6% year over year in 1Q21, reaching $10.3 billion. IDC expects shared cloud infrastructure spending to surpass non-cloud infrastructure spending in the near future. Spending on dedicated cloud infrastructure increased 14.7% year over year in 1Q21 to $4.8 billion with 45.5% of this amount deployed on customer premises. IDC expects that cloud environments will continue to outpace non-cloud throughout its forecast.

With healthy first quarter results and the overall infrastructure market beginning to recover from the pandemic, IDC is forecasting cloud infrastructure spending to grow 12.9% to $74.6 billion for 2021, while non-cloud infrastructure is expected to grow 2.7% to $58.5 billion after two years of declines. Shared cloud infrastructure is expected to grow by 12.2% year over year to $51.8 billion for the full year. Spending on dedicated cloud infrastructure is expected to grow 14.7% to $22.7 billion for the full year.

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As part of the new Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment, IDC tracks various categories of service providers and how much compute and storage infrastructure these service providers purchase, including both cloud and non-cloud infrastructure. The service provider categories IDC follows are: cloud service providers, digital service providers, communications service providers, and managed service providers. In 1Q21, service providers as a group spent $15.5 billion on compute and storage infrastructure, growing 12.5% year over year, and accounting for 54.0% of total compute and storage infrastructure spending. IDC expects compute and storage spending by service providers to reach $74.7 billion for 2021, growing at 11.1% year over year.

Spending on cloud infrastructure increased across most regions in 1Q21, with the highest annual growth rates in Canada (40.3%), China (PRC) (35.0%), and Asia/Pacific excluding Japan and China (APeJC) (28.8%). Western Europe grew 10.8%, the United States grew 4.5%, and Japan declined 1.1%. The smaller regions had mixed results and collectively grew 0.1%.

At the vendor level, all major vendors grew their cloud infrastructure revenue in 1Q21, with the highest growth rates belonging to Lenovo (38.2%) and Huawei (37.9%). Huawei, Lenovo, and HPE/H3C(a) each grew their market share compared to results from the prior year’s first quarter.

Top Companies, Worldwide Cloud Infrastructure Vendor Revenue, Market Share, and Year-Over-Year Growth, Q1 2021 (Revenues are in Millions)

Company

1Q21
Revenue
(US$M)

1Q21
Market
Share

1Q20
Revenue
(US$M)

1Q20
Market
Share

1Q21/1Q20
Revenue
Growth

1. Dell Technologies

$2,467

16.9%

$2,422

18.6%

1.9%

2. HPE/H3C(a)

$1,637

11.2%

$1,386

10.6%

18.2%

T3. Inspur/Inspur Power Systems(b) *

$1,022

7.0%

$915

7.0%

11.7%

T3. Lenovo *

$994

6.8%

$719

5.5%

38.2%

T5. Huawei *

$460

3.1%

$334

2.6%

37.9%

T5. Cisco *

$393

2.7%

$374

2.9%

5.1%

T5. IBM *

$321

2.2%

$301

2.3%

6.9%

T5. NetApp *

$305

2.1%

$301

2.3%

1.4%

ODM Direct

$5,358

36.6%

$4,851

37.2%

10.5%

Rest of Market

$1,667

11.4%

$1,427

11.0%

16.9%

Total Vendor Revenue

$14,624

100.0%

$13,028

100.0%

12.3%

IDC's Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment, Q1 2021

Notes:

* IDC declares a statistical tie in the worldwide cloud IT infrastructure market when there is a difference of one percent or less in the vendor revenue shares among two or more vendors.

a. Due to the existing joint venture between HPE and H3C, IDC is reporting external market share on a global level for HPE and H3C as “HPE/H3C” starting from 2Q 2016. Per the JV agreement, Tsinghua Holdings subsidiary, Unisplendour Corporation, through a wholly owned affiliate, purchased a 51% stake in H3C and HPE has a 49% ownership stake in the new company.

b. Inspur revenues include revenues and server units for Inspur Power Systems. Inspur is reported as a separate company with revenues including Inspur OEM systems and Inspur Power Systems locally developed and branded systems revenue. Per the JV agreement, Inspur Power Commercial System Co., Ltd., has total registered capital of RMB 1 billion, with Inspur investing RMB 510 million for a 51% equity stake, and IBM investing RMB 490 million for the remaining 49% equity stake.

In addition to the table above, a graphic illustrating worldwide cloud infrastructure share for the top 5 companies in 1Q21 and 1Q20 is available by viewing this press release on IDC.com.

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.

A graphic illustrating IDC’s worldwide enterprise infrastructure buyer & cloud deployment forecast by deployment type (non-cloud, shared cloud, dedicated cloud) is available by viewing this press release on IDC.com.

IDC’s Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment is designed to provide clients with a better understanding of what portion of the compute and storage hardware markets are being deployed in cloud environments. The Tracker breaks out each vendors’ revenue into shared and dedicated cloud environments for historical data and provides a five-year forecast. This Tracker is part of the Worldwide Quarterly Enterprise Infrastructure Tracker, which provides a holistic total addressable market view of the four key enabling infrastructure technologies for the datacenter (servers, external enterprise storage systems, and purpose-built appliances: HCI and PBBA).

Taxonomy Notes

IDC defines cloud services more formally through a checklist of key attributes that an offering must manifest to end users of the service. Shared cloud services are shared among unrelated enterprises and consumers; open to a largely unrestricted universe of potential users; and designed for a market, not a single enterprise. The shared cloud market includes a variety of services designed to extend or, in some cases, replace IT infrastructure deployed in corporate datacenters; these services in total are called public cloud services. The shared cloud market also includes digital services such as media/content distribution, sharing and search, social media, and e-commerce. Dedicated cloud services are shared within a single enterprise or an extended enterprise with restrictions on access and level of resource dedication and defined/controlled by the enterprise (and beyond the control available in public cloud offerings); can be onsite or offsite; and can be managed by a third-party or in-house staff. In dedicated cloud that is managed by in-house staff, “vendors (cloud service providers)” are equivalent to the IT departments/shared service departments within enterprises/groups. In this utilization model, where standardized services are jointly used within the enterprise/group, business departments, offices, and employees are the “service users.”

For more information about IDC’s Quarterly Cloud IT Infrastructure Tracker, please contact Lidice Fernandez at lfernandez@idc.com.

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC’s Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly Excel deliverables and on-line query tools.

Click here to learn about IDC’s full suite of data products and how you can leverage them to grow your business.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group ( IDG ), the world’s leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

All product and company names may be trademarks or registered trademarks of their respective holders.

View source version on businesswire.com:https://www.businesswire.com/news/home/20210701005754/en/

CONTACT: Kuba Stolarski

508-935-4172

kstolarski@idc.comNatalya Yezhkova

508-935-4281

nyezhkova@idc.comLidice Fernandez

305-351-3057

lfernandez@idc.comMichael Shirer

508-935-4200

press@idc.com

KEYWORD: UNITED STATES NORTH AMERICA MASSACHUSETTS

INDUSTRY KEYWORD: CONSULTING TECHNOLOGY PROFESSIONAL SERVICES SEMICONDUCTOR SECURITY TELECOMMUNICATIONS SOFTWARE NETWORKS INTERNET MOBILE/WIRELESS HARDWARE

SOURCE: International Data Corporation

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PUB: 07/01/2021 12:46 PM/DISC: 07/01/2021 12:46 PM

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