Data center capex for U.S. hyperscalers grows 10% in Q3 – report

Data center capex for U.S. hyperscalers grows 10% in Q3 – report

The U.S. hyperscaler cloud market had a growth spurt in the third quarter of this year with a 26% increase year-over-year in revenue, according to a report.The report, by 650 Group, stated capex for the data center equipment market grew 10% based on year-over-year results. 

“Third quarter hyperscaler results were robust with strong growth in revenue and data center build outs,” said Alan Weckel, founding analyst for 650 Group, in a statement. “Hyperscalers buy a different class of equipment from a different set of suppliers from the rest of the market and third quarter results are showing those differences in vendor market shares.”


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Weckel said the Tier 2 Cloud providers continued to lack scale, and are relying on hyperscalers instead of building out their own infrastructure.

“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,” according to Weckel.

RELATED: Data center capex for U.S. hyperscalers drops year over year: report

Other report highlights included:

• Amazon Web Services is three times bigger than any other infrastructure-as-a-service (IaaS) competitor.

• Facebook capex guidance for 2019 is now $4 billion less than a year ago, but its 2020 projections are up year-over-year.

• 400 Gbps deployments continue to get pushed out, with hyperscalers looking toward high-density 100 Gbps and/or 200 Gbps as interim solutions.

• Supply chain supporting each hyperscalers continues to be significantly different and diverse.

• Amazon and Microsoft continue to outgrow Facebook and Google.

• The trade war with China is causing more fluctuations in the supply chain than hyperscaler demand.

650 Group’s cloud reports includes capex studies for the colocation, IaaS, software-as-a-service (SaaS), and search and social media markets including spending specifically for data center equipment. 

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