3Q19 cloud data center capex jumps double digits: Dell'Oro

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.

Stephen Hardy

Dec. 17, 2019

2 min read

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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 (see "2019 cloud data center capex to decline from 2018: Dell’Oro"). "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.

The 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.

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About the Author

Stephen Hardy

Editorial Director and Associate Publisher, Lightwave

Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.

Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.

He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.

You can connect with Stephen on LinkedIn as well as Twitter.