Cloud Data Center CAPEX Forecasted to Rise
Tier 1 Cloud Service Providers to Resume Spending on Servers Following
Pause in 2019
March 26, 2020
to a recently published report from Dell’Oro Group, 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.
are additional highlights from the 4Q 2019 Cloud Data Center Capex
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.