Report: Enterprise cloud storage spend to double by 2028 as AI ramps up

Enterprise cloud storage spending will more than double to $128 billion by 2028, up from $57 billion last year, according to Omdia research. The firm analyzed IaaS and PaaS data center revenues for its annual Storage Data Services report. 

AWS dominated the storage segment, collecting 30% of total revenue, followed by Microsoft’s 22% slice and Google Cloud’s 14%. Amazon’s cloud division commanded a 38% share of capacity consumed, thanks to its massive lead in object storage, the most ubiquitous data repository in the cloud. 

Hyperscaler storage revenue shares were roughly in line with the most recent quarterly split of total cloud services revenue, an IT spending category that will approach $700 billion this year, according to Gartner’s latest forecast. Omdia expects cloud storage spending to reach nearly $70 billion in 2024. 

Enterprises entered an optimization cycle last year, trimming back cloud spend as the economy cooled. Storage services took a particularly hard hit, due to overprovisioning in prior years and a shift to pricey graphics processing units to fuel the emerging generative AI boom. 

The industry also absorbed the downstream impacts of a cloud buying spree, which drove a 30% year-over-year storage spending increase in 2022, compared to just 10% growth last year, according to Omdia’s research. 

This year Omdia expects the market to grow 18% year over year as enterprises double down on the data side of AI-related technologies. 

AI adoption is driving shifts in cloud storage consumption patterns, as enterprises bulk up on data to feed large language model tools and applications.  

Not all storage is the same. Object storage dominates the cloud, with 70% of total capacity, according to Omdia’s analysis, but only accounts for roughly one-third of storage spending. It is the cheapest storage type, most commonly used for data management and warehousing. 

Block and file storage each comprise about one-third of cloud storage capacity and are pricier and more highly specialized. Block storage is optimized for databases, business intelligence systems and containerized workloads, while file supports office collaboration tools and server farm environments. 

AWS is ramping up file services, according to the report, for legacy application support and as a high-performance storage option for unstructured data interactions.