2020 will bring a move from capacity consumption to expansion for cloud service providers around the world, according to a report from Dell'Oro Group.
Dell'Oro Group's Cloud Data Center Capex quarterly report includes detailed capital spending of each of the largest ten cloud service providers on data centers and servers, the number of regions and availability zones for each cloud service provider, as well as the number of installed servers. \The report also discusses market trends and drivers of leading cloud service providers' capex growth during the quarter and the outlook for the next year.
The major shift from capacity consumption to expansion will drive cloud data center capex to double-digit growth as cloud service providers continue to grow their footprints in both new and existing regions.
Last year the ten largest cloud service providers globally spent US$6.9 billion on data centers last year.
With such a change in capex, this could cause a ‘ripple' through the supply chain, the research analyst firm states.
“As we had forecasted, some of the major cloud service providers are reducing their data center capex in 2019 as they continue to consume excess server capacity,” explains Dell'Oro group director Baron Fung.
“However, we anticipate that the top 10 cloud service providers will bring more than 40 new regions on line over the next 12 months. Spending on new servers and networking equipment are expected to ramp and drive Cloud data center capex to higher growth in 2020,” Fung continues.
The report's findings include:
- The Top 10 cloud service providers spent $6.9 billion in aggregate on data centers.
- The Top four U.S.-based cloud service providers–Amazon, Facebook, Google, and Microsoft–had an 80% share of the data center capex of the Top 10 cloud SPs.
- Amazon leads all cloud service providers with the most regions in operation, followed by Google and Microsoft.
The report also includes information on the number of regions and availability zones for each cloud service provider, as well as the number of installed servers.
Each report includes the following information for each of the top ten cloud service providers:
- Data center capex
- Server capex
- Number of data centers in regions and availability zones at the worldwide level, and for the major regions: North America, EMEA, Asia Pacific, and CALA (Caribbean and Latin America)
- Server installed-base
- Server unit shipments
The report also analyses:
- What drove the cloud service providers' capex during the quarter?
- What is the outlook for cloud service providers' capex?
- What implications will cloud spending have on the major vendors in the supply chain?
- What is the trend in cloud data center capex and what portion of the capex is allocated to servers?
- What is the global footprint of the cloud service providers and what regions are they planning to expand to?