Pictured: Baron Fung, Research Director at Dell’Oro Group
Research from a leading analyst brand has indicated that capex outlay on cloud data centers is set for over 20% growth year-over-year in the next four quarters.
The report from Dell’Oro Group said that big cloud brands like Google and Microsoft will be spending heavily on expansion. But spending on data center capacity by enterprises, while showing signs of recovery, is expected to be held back by on-going supply chain constraints.
“The cloud service providers’ digestion cycle has persisted longer than predicted due to the continued market uncertainty,” said Baron Fung, Research Director at Dell’Oro Group. “We anticipate another cloud expansion cycle to commence starting in the second half of this year, with the service providers increasing their deployment of the latest generation of servers based on the Intel Ice Lake and AMD EPYC Milan x86 processors. While supply chain issues may hinder investments, the enterprise, rather than the cloud is likely to be impacted.”
Fung said he expects network infrastructure spending to outgrow IT infrastructure spending this year. Google and Microsoft will lead other cloud service providers in data center capex in the next four quarters, collectively launching services in 13 new regions, he forecast.
In separate news, Dell’Oro announced its new Data Center Physical Infrastructure research program. The first report will be released in November 2021.
“We are in the midst of extensive digital transformation, accelerated by the global pandemic, where the limits of power and cooling infrastructure are being tested,” said Lucas Beran, Principal Analyst with Dell’Oro Group. “This is leading to technology transformation related to data center power systems, thermal management, and software monitoring to drive sustainable data centers of the future. I look forward to quantifying and forecasting these market developments with timely, accurate, and detailed analysis.”
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