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Uneven Recovery in the Enterprise Ahead

REDWOOD CITY, Calif. – March 17, 2021 – 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, Hyperscale Cloud data center capex is forecast for 20 percent growth in 2021. However, we anticipate an uneven recovery in enterprise IT spending, mainly with the small and medium enterprises weighing down on the market.

“We predict overall data center capex to return to strong single-digit growth in 2021 as pandemic-related headwinds ease. Growth is anticipated across the major technology areas of IT, network and physical infrastructure, benefitting the whole ecosystem,” said Baron Fung, Research Director at Dell’Oro Group. The Top 10 or Hyperscale Cloud service providers are forecast to outgrow other market segments, with spending driven by the deployment of servers based on the Intel Ice Lake processors, installation of next-generation networks, and the continuation of new data center build-outs,” explained Fung.

Additional highlights from the 4Q 2020 Data Center Capex Quarterly Report:

  • Worldwide data center capex was $187 B in 2020, unchanged from the prior year.
  • Worldwide server unit shipments declined 4 percent Y/Y in 4Q 2020, due to Cloud digestion and Enterprise weakness.
  • Enterprise data center capex projected for 6 percent growth in 2021.

About the Report

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 dgsales@delloro.com.

About Dell’Oro Group

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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