Cloud data center capex jumps double digits: Analyst

Jan. 3, 2020
The good news in 3Q19 was almost entirely driven by new data center construction, reports Dell'Oro Group. The analyst expects the top 10 cloud service providers to open data centers in nearly 40 new regions in 2020.

By STEPHEN HARDY, Lightwave -- An increase in spending on the building of new data centers drove double-digit growth in the capital expenditures (capex) of cloud data center operators during the third quarter of this year, Dell’Oro Group reports.

The Top 10 cloud service providers spent a combine $17.9 billion on data centers during the quarter, a 14% year-over-year bump, the market research firm states in its latest Cloud Data Center Capex Quarterly Report.

"Cloud data center capex for the Top 10 cloud service providers returned to growth after two straight quarters of year-over-year declines," said Baron Fung, director at Dell'Oro Group. "We project that spending on servers will increase in 2020, as the major cloud service providers revert to server capacity expansion and fill new data centers scheduled to launch next year."

Dell’Oro expects the Top 10 cloud service providers to open data centers in nearly 40 new regions in 2020.

The good news in the third quarter was almost entirely driven by new data center construction, as only Amazon and IBM, among the Top 10, upped their server capex to expand server capacity.

Dell'Oro's Cloud Data Center Capex Quarterly Report covers capex spending of each of the 10 largest cloud service providers. Data is provided on facilities and servers by geographic region and availability zone as well as on the number of installed servers.

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.

STEPHEN HARDY is Editorial Director and Associate Publisher of Cabling Installation & Maintenance's sister brand, Lightwave.

Sponsored Recommendations

imVision® - Industry's Leading Automated Infrastructure Management (AIM) Solution

May 29, 2024
It's hard to manage what you can't see. Read more about how you can get visiability into your connected environment.

Global support of Copper networks

May 29, 2024
CommScope designs, manufactures, installs and supports networks around the world. Take a look at CommScope’s copper operations, the products we support, our manufacturing locations...

Adapt to higher fiber counts

May 29, 2024
Learn more on how new innovations help Data Centers adapt to higher fiber counts.

Going the Distance with Copper

May 29, 2024
CommScopes newest SYSTIMAX 2.0 copper solution is ready to run the distanceand then some.