Data Management Workloads Drive Spending on Compute and Enterprise Storage Systems in the First Half of 2023, According to IDC

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NEEDHAM, Mass., November 2, 2023 – Structured Databases/Data Management workloads are driving the largest share of enterprise IT infrastructure spending in the first half of 2023 (1H23), according to the International Data Corporation (IDC) Worldwide Semiannual Enterprise Infrastructure Tracker: Workloads. Organizations spent $6.4 billion on compute and storage hardware infrastructure to support this workload category in 1H23, which represents 8.5% of the market total.

Despite the high level of spending, Structured Databases/Data Management wasn't among the fastest growing workloads with just 1.1% annual growth. Industry Specific Business Applications saw growth of 33.3% in value compared to 1H22. HR/Human Capital Management (HCM), Business Intelligence/Data Analytics, and Development Tools and Applications workloads experienced double-digit year-over-year growth in hardware infrastructure demand with spending growing at 28.5%, 10.4%, and 10.3% respectively. However, only Business Intelligence/Data Analytics ranks in the top 5 workloads of hardware spending while the other two workloads (HR/Human Capital Management (HCM) and Development Tools and Applications) rank 15 and 10 in spending.

Workloads spending profiles vary among product categories. For ODM Direct the highest spending in 1H23 was concentrated on Digital Services with $2.6 billion representing 11.7% of ODM spending. In comparison, OEM Servers and OEM Storage spending is led by Structured Databases/Data Management.

Workloads priorities vary within regions as well, with Asia/Pacific's spending for AI Lifecycle in 1H23 at $2.0 billion just behind Structured Databases/Data Management. Infrastructure spending was the second largest workloads category in Europe, Middle East and Africa (EMEA) during 1H23 at $0.9 billion. In the Americas, the largest workload in 1H23 was Digital Services at $2.8 billion with ODMs representing 46% of total infrastructure spending in the region for the first half of the year.

As enterprise workloads continue to move into public cloud, investments in shared infrastructure (a hardware base for delivering public cloud services) will be increasing faster than investments in dedicated infrastructure across all workloads. Spending for workloads in cloud and shared infrastructure environments will grow at a compound annual growth rate (CAGR) of 11.6% over the next five years with Digital Services and AI Lifecycle spending leading the way. IDC predicts spending for Digital Services will reach $13.4 billion in 2027 and AI Lifecycle $8.1 billion with five-year CAGRs of 15%. Infrastructure spending for cloud and dedicated environments will grow at a 10.7% CAGR over the next five years, with AI Lifecycle being the fastest growing workload with a five-year CAGR of 16.3%. By 2027, IDC expects AI Lifecycle to be the second largest workloads category in terms of spending at $3.9 billion.

Over the next five years, IDC forecasts growth in compute and storage systems spending for cloud-native workloads to be almost twice as high as that of infrastructure supporting traditional workloads (12.2% vs 6.2% CAGR) although traditional workloads will continue to account for the majority of spending during the forecast period (71% in 2027).

Spending for workloads in non-cloud infrastructure environments will grow at a 1.7% CAGR over the next five years with Text and Media Analytics and AI Lifecycle as the fastest growing workloads with five-year CAGRs of 9% and 6.1% respectively. Structured Database/Data Management, Content Applications, and Business Intelligence/Data Analytics workloads combined will account for 24% of spending in 2027 while Text and Media Analytics and AI Lifecycle combined will only account for 11.3% of spending in the same year.

Taxonomy Notes

IDC estimates spending on compute and storage systems across 19 mutually exclusive workloads, defined as applications and their datasets. The full taxonomy including definitions of the workloads can be found in IDC's Worldwide Semiannual Enterprise Infrastructure Tracker: Workloads Taxonomy, 2023 (IDC #US51045423). The majority of workloads map to secondary or functional software markets while several, including Content Delivery and Digital Services, have no equivalent in the software market structure. Workloads are further consolidated into seven workload categories, which include: Application Development & Testing, Business Applications, Data Management, Digital Services, Email/Collaborative & Content Applications, Infrastructure, and Technical Applications.

IDC's Worldwide Semiannual Enterprise Infrastructure Tracker: Workloads provides insight into how enterprise workloads are deployed and consumed in different areas of the enterprise infrastructure hardware market and what the projections are for future deployments. Workload trends are presented by region and infrastructure platform and shared for the enterprise infrastructure hardware market with 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).

For more information about IDC's Semiannual Enterprise Infrastructure Tracker: Workloads, please contact Lidice Fernandez at lfernandez@idc.com.

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