Sharp Decline in Enterprise IT Spending Projected
REDWOOD CITY, Calif. – June 9, 2020 – According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, networks, and data center IT industries, Cloud data center capex is forecasted to grow double-digits, although growth among Cloud service providers look to be mixed. Meanwhile, a sharp decline in Enterprise IT spending is expected, as macroeconomic uncertainties will likely curb capital investments.
“Data center capex returned to higher growth in 1Q 2020, as some of the major Cloud service providers had reverted from capacity digestion to expansion phase,” said Baron Fung, Research Director at Dell’Oro Group. “Stay-at-home orders around the world are placing excess burdens on Cloud infrastructure, prompting some Cloud service providers to bolster capacity in critical areas of the network. However, infrastructure appropriated to advertising, which is facing headwinds this year as enterprises slash marketing budgets, will likely be curtailed,” explained Fung.
Additional highlights from the 1Q 2020 Data Center Capex Quarterly Report:
- The Top 10 Cloud service providers spent $15.4 billion, in aggregate, on data centers, a 15 percent year-over-year (Y/Y) increase.
- Worldwide Server revenue grew 1 percent Y/Y, as the Top 4 Cloud service providers expanded server capacity.
- Shipment of white box servers, which are mainly deployed by the major Cloud service providers, grew to a record 1.3 million units.
- Enterprise data center capex is projected to decline double-digits in 2020.
Dell’Oro Group’s Data Center Capex Quarterly Report details the data center infrastructure capital expenditures of each of the ten largest Cloud service providers, as well as the Rest-of-Cloud, Telco, and Enterprise customer segments. Allocation of the data center infrastructure capex for servers, storage systems, and other auxiliary data center equipment is provided. The report also discusses market trends, drivers of the leading Cloud service providers’ capex growth during the quarter, and the outlook for the next year. To purchase this report, please contact us at firstname.lastname@example.org.
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, networks, and data center IT markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.
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