Cloud Capex Forecasted to Revert to Stronger Growth by Late 2019
REDWOOD CITY, Calif. – June 10, 2019 – 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, the worldwide Server market grew at the slowest pace in eight quarters, increasing one percent year-over-year in 1Q 2019. The lower market growth rate was attributable to spending deceleration by Cloud Service Providers and Enterprises. The report includes an extensive analysis of Cloud capex that forecasts a return to stronger growth by late 2019.
“After a record 29 percent revenue growth last year, the Server market is off to a slow start with a modest one percent growth,” said Baron Fung, Director at Dell’Oro Group. “In this quarter, server unit shipments declined for the first time in five quarters, and growth in server average selling prices started to plateau as the refresh cycle winds down. Furthermore, the major Cloud Service Providers are slowing capex in aggregate to digest excess infrastructure capacity, resulting in fewer server purchases. Looking ahead, as the Enterprise continues to shift workloads to Public Cloud, we expect the Cloud Service Providers to resume capex growth to expand capacity by late 2019,” explained Fung.
Following are additional highlights from the 1Q 2019 Server Quarterly Report:
- Dell ranked No.1 in vendor revenue share, followed by HPE, Inspur, Lenovo, Cisco, Huawei, and IBM.
- Data center-related capex of the Top 4 Cloud Service Providers grew in the mid-single digits year-over-year.
- White box servers, which are primarily deployed by the Top 4 Cloud, continued to gain share from the branded OEM vendors despite of a Y/Y decline.
Dell’Oro Group’s Server Quarterly Report provides complete in-depth coverage of the Server market with tables covering manufacturers’ revenue and port shipments for Blade, High-Density, and Stand-Alone servers. The report describes network, VM density, and white box versus traditional enterprise server shipments. 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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