Higher Cloud Datacentre Capex Forecast for 2020 Despite Challenges

In BICSI Blog, BICSI Bytes, Featured, News by info@bicsi.com.au

According to a recent Dell’Oro report, Cloud datacentre capex is forecast for higher growth in 2020, despite current 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 datacentre 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 Cloud service providers will need to expand their infrastructure at a measured pace to capture this incremental demand.”

Additional highlights from the report:

· Top 10 Cloud service providers spent US$66 billion, in aggregate in 2019, a 3% annual increase.

· Amazon Web Services maintained a 50% Cloud revenue share in 2019, although Microsoft Azure and Google Cloud Platform gained share.

· Spending on servers is projected to compose of 47% of datacentre capex in 2020.