2025 Data Center Build-Outs to Set AI/ML Records; Enterprise Market for Data Center Equipment to Show Modest Growth
INCLINE VILLAGE, NV. Feb. 13, 2024 — According to an upcoming report issued by founding analysts of 650 Group, US Hyperscaler Cloud market revenue and CAPEX will surge to record highs in 2025. Revenue and CAPEX shifted significantly in 2024 as Hyperscalers prioritized AI/ML, and that trend will accelerate in 2025.
650 Group’s Cloud Report covers Colocation, Infrascture as a Service (IaaS), Software as a Service (SaaS), and Search & Social Media.
2024 Full Year Highlights:
- Different approaches to AI/ML impact supplier market shares
- Hyperscaler IaaS revenue growth outpaces Search and Social revenue
- The market rapidly shifted towards Ethernet scaleout networks in 2H24, and InfiniBand remained the dominant technology for the entire year
- New cloud startups contributed significantly to CAPEX surge
- AWS, Azure, and GCP stay dominant in Infrastructure as a Service (Iaas)
- Hyperscalers are poised to ramp next-generation server and networking architectures over the next two years focused on AI/ML; this is a new class of AI/ML-focused hardware
- Heavy push from foundational models to agents as enterprise monetization begins
The 650 Group Cloud reports include CAPEX studies for the Co-location, IaaS, SaaS, and Search and Social Media markets, including a unique look at spending specifically for data center equipment. In addition, going beyond just Cloud revenue provides a unique look into where and how the largest Cloud providers deploy equipment. Finally, the report shows the trend towards more CAPEX spending in IaaS as many SaaS providers choose IaaS instead of building their own infrastructure.
“2024 IaaS revenue hit a record, far exceeding previous records,” said Alan Weckel, founding analyst for 650 Group. “Many cloud providers made significant and company-changing bets during the second half of 2024, which will change the cloud market and the way computing, networking, and storage get deployed in the future. As a result, CAPEX and investment are set to soar as AI/ML in IaaS start to take off.”
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 being the first to market research with over 12 research programs focused on cloud trends.
To learn more, visit http://www.650group.com