Dell’Oro Group has launched coverage of cloud data center capital expenditures (capex). The market research firm suggests in the first of what is expected to be a series of quarterly reports on the topic that such data center operators won’t be spending as freely this year as they did in 2018.
“Data center capital expenditure, which consumes the largest share of cloud service provider spending, is a valuable measure that we track each quarter,” explained Baron Fung, a newly minted research director at Dell’Oro. “We also forecast data center capex of the largest cloud service providers, which offers insights to potential supply chain disruptions. For example, after traveling to China and learning that IT spending by cloud service providers would soften as economic uncertainty escalates, we forecasted Baidu, Alibaba, and Tencent (BAT) to collectively decline data center capex in first half 2019. Indeed, major IT suppliers to BAT, such as Cisco and Lenovo, have recently attributed weaker 2Q19 earnings to this sector.”
“Dell’Oro Group has been tracking cloud data center service provider capex spend since 2014 as an important factor to our forecast models,” said Tam Dell’Oro, CEO and founder of Dell’Oro. “With Baron joining the firm, he took the initiative to expand our data and refine our analysis. This information is a solid set of predictive analysis.”
Dell’Oro Group’s “Cloud Data Center Capex” quarterly report will cover the capital spending on data centers and servers by each of the 10 largest cloud service providers. In addition to capex, the report will include information on the number of regions and availability zones for each cloud service provider as well as the number of installed servers. The report also will discuss market trends and drivers of leading cloud service providers’ capex growth during the quarter and the outlook for the next year.
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