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Worldwide data centre spending surpasses $150bn

Written by Wed 25 Mar 2020

Dell, Microsoft, HPE & Cisco among the top vendors

Global spend on data centre hardware and software totalled $152 billion last year, according to new research from IT market watchers Synergy Research.

The figure, which represents a two percent rise from 2018, combines worldwide spending on public cloud and private cloud/traditional data centre hardware and software.

The final quarter of the year saw a seven percent rise in spending on all data centre hardware and software, which Synergy said was typical for the season.

In 2019, spending on public cloud data centre hardware and software rose by seven percent, while spending on traditional data centre and private cloud solutions dropped by one percent.

37 percent of the $150 billion invested into data centre kit went into public cloud data centres, a 25 percent jump from 2015.

“Enterprise spending on their own data centres is being crimped by the shift in workloads to public clouds,” commented John Dinsdale, chief analyst at Synergy Research. “We are already seeing server shipments to public cloud providers outstripping shipments to enterprises and that trend will continue.”

The products Synergy includes in its industry research are servers, OS, storage, networking, virtualization software, network security and management software. Unsurprisingly, almost half of data centre spend (46 percent) goes towards servers.

Vendors Dell, Microsoft, HPE and Cisco are the current market leaders, followed by Huawei, IBM, VMware, Inspur and Lenovo. In the public cloud segment, ODMs accounted for the biggest share of the market, benefiting from a year-end spike in shipments to hyperscale operators.

Synergy also released fresh quarterly research into the global capital expenditure (capex) of hyperscale cloud and internet giants, reporting an 11 percent rise in yearly data centre spend.

There are now 512 hyperscale data centres worldwide, up from 430 at the start of last year.

Dinsdale took the opportunity to predict how the novel coronavirus pandemic might impact the bottom lines of hyperscale operators, such as Google, Amazon and Facebook, claiming hyperscalers were well ‘insulated’ from the economic effects of the outbreak.

“While there are many unknowns, what is clear is that the hyperscale operators generate well over 80 percent of their revenues from cloud, digital services and online activities,” he said.

“The radical shifts we are seeing in social and business behavior will actually provide some substantive tailwinds for many of these businesses. These hyperscale firms are much better insulated against the current crisis than most others and we expect to see ongoing robust levels of capex,” he added.

Written by Wed 25 Mar 2020

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