How Does Your Infrastructure Spending Stack Up To The World?

June 5, 2023 Timothy Prickett Morgan

As IT analysts, as well as IT journalists, we believe that the economic questions of how many widgets consumed, how much revenue and profit do they generate, and how fast are markets changing and evolving as new widgets come and old widgets go are just as important as the feeds, speeds, slots, and watts of any particular widgetry.

That is why we have always looked at both sets of IT data over time, to get a 3-D feel for the market and its flows of hardware, software, and services across workloads. It is very rare when one of the market researchers actually brings it all together to show how much spending is on particular workloads, which we think is very interesting in the abstract and also interesting for you to gauge how your IT budget is spent on particular workloads.

As it turns out, and as you probably expected, data management is the biggest workload in terms of consuming the enterprise infrastructure budget, according to the latest data from IDC:

The data above is for spending in 2022 and a forecast in spending growth for seven different workload categories out through to the end of 2027. These workload categories include:

Application Development and Testing
Business Applications
Data Management
Digital Services
Email/Collaborative and Content Applications
Infrastructure, and
Technical Applications

Each one of these workload categories has a number of sub-elements, and the Data Management category specifically, which is the largest part of the infrastructure budget in 2022 and is forecast to be the largest one out to 2027 as well, includes a bunch of different things: AI Lifecycle, Business Intelligence and Analytics, Structured Database/Data Management, Text and Media Analytics, and Unstructured Database. In 2022, there was $41.4 billion in spending on compute and storage hardware and software to underpin all of these individual workloads, and the compound annual growth rate (CAGR) for all data management workloads collectively will be 8.3 percent between 2022 and 2027, reaching $61.7 percent of spending by the end of the forecast period. Most of this growth will come from unstructured data storage and processing and artificial intelligence.

The Technical Applications, which we presume are traditional HPC simulation and modeling workloads, have a more modest 5.8 percent CAGR and will reach $12 billion in infrastructure spending worldwide by 2027. If you work the CAGR backwards over six distinct years, that puts current Technical Applications spending in 2022 at just a tad over $9 billion.

Detailed figures were not presented by IDC for the other workloads classes, which is unfortunate. But you can just look at each bar and see that 2023 is pretty much a carbon copy of 2022. If we stare very hard at the chart above and take a ruler to it, we see that total spending in 2022 was around $155 billion, and data management therefore comprised about 26.7 percent of the total across all of those sub-categories mentioned above. Business Applications was the second biggest part of the budget, somewhere around 23 percent by our eye and somewhere around $35 billion. Email, Collaboration, and Content Applications comprised around 19 percent of around $29.5 billion, and Infrastructure (which is admittedly a vague term) was the fourth largest category and was around 16 percent of the total and around $25 billion, The remaining three categories were under $10 billion and roughly 5 percent of the market.

So, if you think your IT shop is spending too much on hardware and systems software to run data management workloads, you are in good company. And obviously, this is an average across all industry groups, so you probably have more money dedicated to Business Applications and less money allocated to Technical Applications, for instance. But in general, this will give you a feel about how your budget, by workload, compares to the world at large. Which means you can argue for more or less spending in certain areas based on an informed opinion from the averages across the globe.

This Issue Sponsored By

Table of Contents

Content archive

Recent Posts

Subscribe

Pages

Search