Global data center capex grew 7% in the first quarter of 2021, says Dell’Oro Group. The market research firm states in its latest Data Center Capex Quarterly Report that the quarter recorded the highest level of growth since the start of the pandemic a year ago.

That said, cloud hyperscalers haven’t yet fully put their foot on the accelerator, and their capex growth isn’t expected to exceed 20% until the second half of the year.

“Capex on data center construction and network infrastructure returned to double-digit growth in 1Q21,” said Baron Fung, research director at Dell’Oro Group. “However, spending on servers grew marginally, with higher server average selling prices offset by the decline in unit shipments. We anticipate the cost of servers to continue to climb throughout the year, due to rising commodity and supply chain costs, adoption of accelerated servers, and ramp of the new servers based on the Intel Ice Lake processors.”

Despite these limitations, servers accounted for 39% of data center capex in the quarter. Top server vendors by revenue included Dell, HPE, and Inspur. White box server vendors lost share due to Cloud softness.

Overall, Dell’Oro predicts the Top 10 cloud service providers will increase their capex by 18% in 2021.

Dell’Oro’s Data Center Capex Quarterly Report covers the data center infrastructure capital expenditures of each of the 10 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. Learn more at www.delloro.com.

-- Stephen Hardy, Lightwave