The data center sector is experiencing healthy growth, according to a recently published report from independent analyst firm Dell’Oro Group,It found that data center capex grew at the fastest rate year-over-year in three years in the first quarter of 2022. New cloud deployments and higher data center infrastructure costs were the twin factors behind this rise in spend.

“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 four cloud service providers expand their services and as server memory prices trend higher. explained Fung.

Fung found that worldwide data center capex growth is expected to trend higher throughout 2022, and that the top cloud service providers are scheduled to launch services in more than 30 new regions before year end.