IDC Boosts IT Spending Forecasts For 2023 And Beyond

November 13, 2023 Timothy Prickett Morgan

If you asked 1,000 IBM i shops why they were paying a premium for their IBM i systems, all of them would tell you two things: The excellence of the database management system that is at the heart of the IBM i platform and the reliability of the underlying Power Systems hardware and the IBM i operating system that has the Db2 for i database embedded within it.

As it turns out, data management, which includes databases as well as file systems and other storage, is the largest component of spending on server and storage infrastructure in 2022, and it is projected to continue growing and being the largest piece of the spending pie going forward, according to IDC. And if you compare the latest forecast with the one we took a look at back in June from IDC, the spending is projected to be up in 2023 and out through the forecast period through the end of 2027.

Now, remember that this is infrastructure spending on various workloads, and the numbers shown above are for servers and storage together to support those workloads and does not include the cost of the middleware and application software that comprises those workloads. Think of this as a breakdown of how server and storage capacity is allocated by workload averaged across the whole world, which is why and how we think this data from IDC is useful. With the bar charts above, you can figure out how you compare to the rest of the world.

This passage in the IDC report was also interesting: “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 percent versus 6.2 percent CAGR) although traditional workloads will continue to account for the majority of spending during the forecast period (71 percent in 2027).”

This just goes to show you that change in the IT department comes very slowly – usually over many decades, in fact. It just takes a long time to change something so big and complex as the datacenter and its host of applications that run the business.

It would be interesting to see this same chart with the aggregate spending on either third party software and the cost of homegrown software for each category thrown in. We strongly suspect that the cost of delivering the applications that ride atop this server and storage infrastructure whose global spending is outlined above is several times higher than the spending on the infrastructure.

In the forecast earlier this year, IDC was not projecting ay growth between 2022 and 2023, but now you can see that there is a tiny bit of growth that amounts to several billion dollars in spending, and further out beyond 2024 the growth rates for infrastructure spending accelerates rather than flattens out. It is hard to say how much of this is being driven by inflation here in 2023 and how much is actually a budgetary expanse, but we suspect that the assumption going forward is that inflation will be tamed somewhat and that this is a real budgetary increase for spending on servers and storage across all categories of application classes.

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