650 Group Finds Data Center Equipment CAPEX for the US Hyperscalers Grows 10% Y/Y in 3Q19

Significant Shift in Buying Patterns of the Tier Two Cloud Causes Massive Fluctuations in the Supply Chain
PORTOLA VALLEY, Calif.  Nov. 7, 2019 — According to a newly released report issued by founding analysts of 650 Group, US Hyperscaler Cloud market revenue grew 26% Y/Y in 3Q19 while CAPEX used for DC Equipment grew with mid-teen Y/Y results.
650 Group’s Cloud Report covers Colocation, IaaS, SaaS, and Search & Social.
“3Q19 Hyperscaler results were robust with strong growth in revenue and data center build outs,” said Alan Weckel, founding analyst for 650 Group. “Hyperscalers buy a different class of equipment from a different set of suppliers from the rest of the market and 3Q19 results are showing those differences in vendor market shares. The significant slowdown in Tier 2 Cloud spending, with many Tier 2 Clouds relying more on Hyperscalers has changed the supply chain and how it is working beneath the Hyperscalers.”
Report Highlights:

  • Tier 2 Cloud providers continue to lack scale and instead are relying on Hyperscalers instead of building out their own infrastructure
  • Facebook CAPEX Guidance for 2019 is now $4B less than a year ago; 2020 projections up Y/Y
  • Microsoft Azure won the coveted project Jedi award over Amazon AWS
  • AWS remains 3X larger than any other IaaS competitor
  • 400 Gbps continues to get pushed out; Hyperscalers are looking toward high-density 100 Gbps and/or 200 Gbps as an interim solution
  • Supply chain supporting each hyperscalers continues to be significantly different and diverse
  • We expanded the list of Cloud Providers we cover in the report
  • Amazon and Microsoft continue to outgrow Facebook and Google
  • Trade War causing more fluctuations in supply chain than Hyperscaler demand

The Cloud reports includes CAPEX studies for the Colocation, IaaS, SaaS, and Search and Social Media markets including unique look at spending specifically for data center equipment.  Going beyond just Cloud revenue provides a unique look into where and how the largest Cloud providers deploy equipment.  In the report, you can see the trend towards more CAPEX spending occurring in IaaS as many SaaS providers choose IaaS instead of building out their own infrastructure.

For more information about the report, contact the sales department at 650 Group at +1 650 600 7104 or val@650group.com or www.650group.com.
About 650 Group
650 Group is a leading Market Intelligence Research firm for communications, data center and cloud markets.  ​Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies.  650 Group focuses on leading edge market trends and research and prides itself on first to market research.