Security News > 2021 > October > Cloud infrastructure spending decreased 2.4% YOY in 2Q21

Spending on compute and storage infrastructure products for cloud infrastructure, including dedicated and shared environments, decreased 2.4% year over year in the second quarter of 2021 to $16.8 billion, according to IDC. This decrease comes after six quarters of year-over-year growth, and most notably compares to the 39.1% annual growth seen by the market in 2Q20, when the world just entered the pandemic with the first wave of business and country closures causing a spike in investments in cloud services and infrastructure.

Investments in non-cloud infrastructure increased 3.4% year over year in 2Q21 to $13.4 billion recovering from a 7.2% decline in 2Q20. Spending on shared cloud infrastructure decreasing too.

Spending on shared cloud infrastructure reached $11.9 billion, a decrease of 6.1% compared to 2Q20, and a 17% increase from 1Q21. Weakness in year-over-year demand from public cloud service providers comes after an exceptionally strong 2Q20, in which spending increased 55.5% driven by the spike in demand for cloud services in the first months of the pandemic.

A continuously strong demand for shared cloud infrastructure is expected, with shared cloud infrastructure spending surpassing non-cloud infrastructure spending by 2022.

Despite weakness in 2Q21, cloud infrastructure spending is forecast to grow 12% to $74.3 billion for 2021, while non-cloud infrastructure is expected to grow 2.7% to $58.9 billion after two years of declines.

Canada showed the strongest year-over-year increase in cloud infrastructure spending in 2Q21 at 25.6% while Western Europe recorded the strongest decline at 8.8%. For the full year, spending on cloud infrastructure is expected to increase across all regions compared to 2020.

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