Cloud service providers will revert from capacity consumption to expansion by 2020, according to Dell’Oro Group. This change will drive Cloud data center capex to double-digit growth next year as the major Cloud service providers expand data center footprints in new and existing regions.
“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,” said Baron Fung, Director at Dell’Oro Group. “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,” explained Fung.
Highlights from 2Q 2019
- The Top 10 Cloud service providers spent $6.9 billion in aggregate on data centers.
- The Top 4 U.S.-based Cloud service providers–Amazon, Facebook, Google, and Microsoft–had an 80 percent 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.