DC Equipment CAPEX Spending Remains Strong Despite Economic Jitters and Supply Constraints
INCLINE VILLAGE, NEV. – Aug. 18, 2022 – According to a newly released report issued by the 650 Group, US Hyperscaler Cloud market revenue grew 15% Y/Y in 2Q22, while the supply chain for Data Center Equipment into Hyperscalers performed unevenly due to continued semiconductor and component shortages.
650 Group’s US Hyperscaler Cloud Report covers IaaS, SaaS, and Search & Social and publishes shortly after Amazon, Apple, Google, Meta (Facebook), and Microsoft report earnings. It is focused on the Hyperscalers, which account for approximately 70% of revenue and spend in the Cloud.
2Q’22 Highlights:
o Meta (Facebook) recorded its first Y/Y revenue decline
o Despite decommits in the supply chain, US Hyperscalers kept their 2022 CAPEX guidance
o 1H22 CAPEX came in as anticipated
o US Hyperscaler made $1M in Cloud revenue every minute during 2Q22
o Facebook and Microsoft deploy a record number of 400 Gbps ports
o Inflation creeping into US Hyperscalers costs in both CAPEX and OPEX
o Hyperscalers are poised to ramp next-generation server and networking architectures over the next two years focused on AI/ML, and a new class of metaverse focused hardware
“Despite economic jitters and concerns over a recession, US Hyperscalers continue to invest in data center buildouts,” said Alan Weckel, founding analyst for 650 Group. “Despite the difficulties in the supply chain, Hyperscalers continue to push the envelope in process geometry and next-generation technologies, such as record-setting 400 Gbps switch shipments. As a result, CAPEX and investment are set to soar over the next several years as the Cloud moves towards the metaverse and AI/ML in IaaS start to take off.”
The US Hyperscaler Cloud reports include CAPEX studies for the IaaS, SaaS, and Search and Social Media markets, including a unique look at spending specifically for data center equipment. In addition, the report looks at projected revenue and CAPEX through 2026. Finally, the report shows the trend towards more CAPEX spending occurring in IaaS as many SaaS providers choose IaaS instead of building their own infrastructure.
About 650 Group650 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 with over 12 research programs focused on Cloud trends. To learn more, visit: http://www.650Group.com