Cloud Service Providers to Resume Data Center Capex Expansion in 2021, According to Dell'Oro Group
Soft Enterprise IT Spending to Persist
REDWOOD CITY, Calif., Dec. 10, 2020 /PRNewswire/ -- 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, we predict the Cloud service providers to resume data center capex expansion in 2021, after a short pause in the second half of 2020. While the Enterprise returned to higher growth, soft Enterprise IT spending could persist due to overhang from the pandemic and as Cloud adoption continues to gain momentum.
"The major U.S. Cloud service providers have entered a digestion cycle and have slowed the purchases of servers and other data center equipment. However, we predict this digestion cycle to be short-lived, and capex growth will return to double-digit growth as soon as 1Q 2021," said Baron Fung, Research Director at Dell'Oro Group. "Some of these Cloud service providers are overdue to replace or expand their server fleet, and many have aggressive plans to expand their global footprint of data centers which would spur a wave of spending," explained Fung.
Additional highlights from the 3Q 2020 Data Center Capex Quarterly Report:
- Data Center capex for the Top 10 Cloud service providers grew 4 percent in 3Q 2020.
- Worldwide server revenue grew 5 percent Y/Y, driven by 1.2 million units of white box servers to the Cloud.
- Enterprise data center capex declined 1 percent Y/Y.
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 [email protected].
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.
SOURCE Dell'Oro Group
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