Q1 data center capex grew at fastest rate in 3 years: Dell’Oro

July 6, 2022
“Data center capex grew double-digits year-over-year in 1Q 2022 despite persistent supply chain constraints,” noted Baron Fung, research director at Dell’Oro Group.
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Telecommunications, networks and data center IT industries analyst Dell’Oro Group reports that in 1Q 2022, data center capex grew at the fastest rate year-over-year in three years.

New cloud deployments and higher data center infrastructure costs drove capex, said the analyst, who added that Amazon, Google, Meta and Microsoft are all projected to increase their data center spend 25 percent in 2022.

Dell'Oro Group's 1Q 2022 Data Center IT Capex Quarterly Report maintains that worldwide data center capex growth is expected to trend higher throughout 2022.

Persistent supply chain challenges are expected to limit server unit growth to high single-digits in 2022, adds the researcher. Notwithstanding, the report notes the top 4 US cloud service providers are scheduled to launch services in more than 30 new regions in 2022.

“Data center capex grew double-digits year-over-year in 1Q 2022 despite persistent supply chain constraints,” noted Baron Fung, research director at Dell’Oro Group.

Fung continued, “However, growth was attributed to higher data center equipment average selling prices as vendors passed supply chain costs to end-users, and from the adoption of new server architectures and accelerated computing. We anticipate further upside in data center capex later this year, as the top 4 cloud service providers expand their services and as server memory prices trend higher.”

Dell’Oro Group’s Data Center IT Capex Quarterly Report details the data center infrastructure capital expenditures of each of the ten 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. 

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