Worldwide data center capex to hit $400 billion by 2027: Dell’Oro

Feb. 14, 2023
Dell’Oro notes that macroeconomic factors might dampen capex in the near term. However, forthcoming data center architectures will create growth long term.

Global data center capex will grow 11% by 2027 to reach $400 billion, according to a new report from Dell’Oro Group. Hybrid cloud will drive the need for increased capex in both the hyperscale and enterprise markets, the market research firm predicts in the January 2023 Data Center IT Capex 5-Year Forecast Report.

“While the cloud hyperscalers will account for half the data center infrastructure spending by 2027, significant opportunities exist on-premises,” said Baron Fung, research director at Dell’Oro. “Enterprises will continuously optimize their IT deployments, balancing workloads in the multi-cloud with those on-premises. New applications will also demand infrastructure at the edge, leading to the emergence of a new ecosystem. Furthermore, upcoming advances in new server architectures, accelerated computing, and sustainability will enable greater efficiencies in the data centers of the future.”

Fung and Dell’Oro note that macroeconomic factors might dampen capex in the near term. However, forthcoming data center architectures will create growth long term. Dell’Oro predicts edge computing will compose 8% of all data center infrastructure spending by 2027.

Dell’Oro’s Data Center IT Capex 5-Year Forecast Report provides an overview of the market with historical data from 2014 to the present. The forecasts cover market and technology trends and include tables covering data center and server capex and server unit shipments forecasts for Top 4 US Cloud, Top 3 China Cloud, Top 3 Tier 2 Cloud, Rest-of-Cloud, Telco, and Enterprise customer segments. The report also breaks out markets for data center infrastructure equipment, along with server, storage system, and other data center equipment revenues sub-segments.

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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.

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