Report: Despite Cloud Growth, Clear Skies Ahead for Hardware Spending

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Cloud technologies are increasingly ubiquitous in business environments, with more and more previously on-prem services being delivered via cloud services rather than purchased hardware — particularly in support of remote work environments in the wake of Covid-19. But despite this change in the weather, a new report (Hardware Trends in 2022 Beyond) from IT solutions firm Spiceworks Ziff Davis (SWZD) says that hardware remains the top category for IT spending.

SWZD says that it surveyed 1,145 IT Buyers from organizations across North American and Europe over the course of 2021, asking them about their spending and tech adoption plans across hardware, software, cloud, and managed services. This data was combined with more than 10 years of historical IT spending and adoption data.

The survey did find that 40% of workloads are running in the cloud — which SWZD expects to increase to 50% by next year — and that cloud spending grew from 22% of IT budgets (2020) to 26% (2022). This aligned with a decrease in hardware spending — 33% in 2020, 30% in 2022, almost entirely from lower spending on server hardware.

Still, SWZD cautioned, don’t be too hasty in assuming that everything would move to the cloud: it found that 94% of organizations intended to still be using on-prem servers in some capacity in 2023. Much of the cloud adoption is hybrid, integrated with on-prem resources — 36% of businesses are working with this model right now, and an additional 18% plan to adopt it by 2023, which would constitute a majority of businesses (54%). This trend is even stronger with larger enterprises (500+ employees), where nearly half (49%) already have hybrid cloud infrastructure and 75% planning to integrate within the next two years.

“[Hardware] still represents the largest IT spending category and physical servers are here to stay,” the report concludes. “Instead of disappearing, they’ll evolve to integrate more seamlessly with cloud infrastructure, allowing organizations more flexibility to suit their needs.”

Beyond the cloud-versus-on-prem contention, SWZD found that AMD’s share of IT hardware purchases continue to grow, with businesses’ adoption of its processors slated to rise to 60% for PCs and 44% for servers. Arm is similarly booming, with adoption poised to double from 11% to 22% in the next two years. Storage is also moving forward, with 68% of businesses planning to adopt all-flash storage arrays by 2024 and a majority of businesses (54%) planning to use NVMe storage on-prem by the end of 2023.

To read “Hardware Trends in 2022 and Beyond,” click here.

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