Cloud spending increased in Q1 2020, as COVID-19 spurred demand for collaboration


Infrastructure spending on cloud grew modestly, while other spending plummeted by 16.3%, according to a new IDC report.

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As the COVID-19 pandemic ushered in a new age of working from home, organizations began to rely on technology that would support a workforce built around virtual collaboration, using tools like video conferencing and cloud platforms. And as COVID-19 continues to spread, these tech features will undoubtedly continue to be a staple of the “new normal” workplace.

New data from the International Data Corporation (IDC) Worldwide Quarterly Cloud IT Infrastructure Tracker details spending on the infrastructure for public and private cloud environments—including spending on server, enterprise storage, and Ethernet switch)—for the first quarter of 2020.  

The big takeaways from the report show an overall (but modest) increase on cloud spending (2.2%) and a major drop (16.3%) on spending for non-cloud infrastructure.

According to the report, COVID-19 was the primary variable that influenced cloud spending. The necessity of shifting to remote work, “increased demand for cloud-based consumer and business services driving additional demand for server, storage, and networking infrastructure utilized by cloud service provider datacenters,” it said. 

SEE: Cheat sheet: The most important cloud advances of the decade (free PDF)

Because of this, and the loss of profit for many organizations, private cloud infrastructure spending declined 6.3% while public cloud infrastructure spending hit $10.1 billion in 1Q20. However, the report also predicts that private cloud infrastructure spending will rebound, eventually ending up as a positive figure by the year’s end.

According to the report, cloud adoption will continue to grow through 2020 because of the “demand for more efficient and resilient infrastructure deployment,” and the investments on cloud infrastructure are predicted to hit $69.5 billion–representing more than half (54.2%) of overall IT spending on infrastructure. 

SEE: How to build a successful career as a cloud engineer (free PDF)

The IDC also offered long-term predictions on cloud IT infrastructure spending, expecting it to reach $105.6 billion by 2024, and representing more than half (62.8%) of total spending on IT infrastructure. It also predicts that while cloud infrastructure spending will be the main focus for infrastructure spending in the enterprise, non-cloud IT infrastructure will also recover this year,  but will end up in the negative, at -1.6%, by 2024.

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