1Q22 data center capex shows major increase: Dell’Oro
Data center capital expenditures (capex) in the first quarter of 2022 grew at a rate not seen for three years, according to Dell’Oro Group. The market research firm states in its newly released Data Center IT Capex Quarterly Report that new cloud deployments and higher data center infrastructure costs provided the impetus for the quarter’s performance. Data center capex should continue on an upward path this year, Dell’Oro analysts predict.
“Data center capex grew double-digits year-over-year in 1Q 2022 despite persistent supply chain constraints,” said Baron Fung, research director at Dell’Oro Group. “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.”
Those Top 4 service providers – Amazon, Google, Meta, and Microsoft – are expected to launch services in more than 30 new markets this year, Dell’Oro predicts. However, a counterbalance to this positive trend is a projection that supply chain constraints will limit server unit growth to the high single-digits in 2022.
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.
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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.
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