Citing the many major cloud services providers with expansion plans, Dell’Oro Group expects data center capex to grow by double-digits in 2022. How far into double-digits capex climbs will depend on supply chain constraints, which the market research firm expects to be consistent this year, according to the company’s 4Q 2021 Data Center IT Capex Quarterly Report.
Dell’Oro analysts expect hyperscale cloud service providers to launch services in more than 40 new regions this year. For this reason, capex at such operators as Amazon, Google, Meta, and Microsoft is projected to climb 28% in 2022; in fact, Dell’Oro believes such cloud service providers will continue to be engines of growth over the next several years (see “Hyperscalers to double data center capex over next five years: Dell’Oro”). Overall, Dell’Oro expects worldwide data center capex to exceed $240 billion this year as server unit shipments return to double-digit growth as supply constraints ease.
“In 2021, worldwide data center capex grew 9% and surpassed $200 billion for the first time,” said Baron Fung, research director at Dell’Oro. “However, growth mainly came from higher server average selling prices as vendors pass on higher commodity and supply chain costs to end-users, while units grew low single-digits due to supply constraints. New server platforms equipped with next-generation processors and AI-accelerators also contributed to higher revenue growth. The market is primed for further acceleration this year as vendors navigate through the ongoing sourcing challenges. New data center footprint, network upgrade cycle, and the continued adoption of accelerated computing are expected to drive higher spending among the major cloud service providers and enterprise customers.”
Dell’Oro’s Data Center IT Capex Quarterly Report details 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.
For related articles, visit the Business Topic Center.
For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.
