Tier 1 Cloud Service Providers to Resume Spending on Servers Following Pause in 2019
REDWOOD CITY, Calif. – March 25, 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 for higher growth despite market challenges. The Tier 1 Cloud service providers are due to resume spending on servers following a pause in 2019.
“Despite recent market uncertainties, we anticipate the Tier 1 Cloud service providers to increase data center capex as planned, primarily on servers, as the sector seeks to resume capacity expansion,” said Baron Fung, Research Director at Dell’Oro Group. “We project a steep decline in enterprise IT spending due to severe near-term supply and demand disruptions from COVID-19. Enterprises will seek to conserve capital during these uncertain times and resort to the Cloud to satisfy near-term demand for digital services. We expect that the Cloud service providers will need to expand their infrastructure at a measured pace to capture this incremental demand,” explained Fung.
Following are additional highlights from the 4Q 2019 Cloud Data Center Capex Quarterly Report:
- The Top 10 Cloud service providers spent $66 billion, in aggregate in 2019, a 3 percent annual increase.
- Amazon Web Services maintained a 50 percent Cloud revenue share in 2019, although Microsoft Azure and Google Cloud Platform gained share.
- Spending on servers projected to compose of 47 percent of data center capex in 2020.
Dell’Oro Group’s Cloud Data Center Capex Quarterly Report details the capital spending of each of the ten largest Cloud service providers. Data is provided on facilities and servers by geographic region and availability zone as well as on the number of installed servers. 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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