Hyperscale operator CAPEX in Q4 2019 exceeds $32bn



hyperscale CAPEX ExtremeCloud IQ helps organisations automate end-to-end, edge-to-DC network operations

Hyperscale operator CAPEX in the fourth quarter of 2019 surpassed $32 billion, setting a new record for quarterly spend, according to new research.

For the full year, total hyperscale operator CAPEX was up by 1% from the previous year, however, their CAPEX that was specifically targeted at data centres increased, growing by 11% in 2019, Synergy Research Group revealed.

The top five hyperscale spenders in 2019 were Amazon, Google, Microsoft, Facebook and Apple, whose CAPEX budgets far exceed the other hyperscale operators, according to reports.

Synergy’s research found that in 2019, CAPEX growth at Amazon, Microsoft and Facebook was strong, but Apple’s CAPEX dropped off sharply, which brought down the overall figures.

Outside of the top five, other top hyperscale spenders include Alibaba, Tencent, IBM, JD.com, Baidu and Oracle.

“As expected there was a significant boost in hyperscale operator CAPEX in the second half of 2019, which helped to counter a relatively soft start to the year,” said John Dinsdale, a Chief Analyst at Synergy Research Group.


Newsletter

Time is precious, but news has no time. Sign up today to receive daily free updates in your email box from the Data Economy Newsroom.


“Most notable was that annual spending on data centres grew at a double-digit rate despite total CAPEX being somewhat flat.

“How will coronavirus impact this trend going forwards? While there are many unknowns, what is clear is that the hyperscale operators generate well over 80% of their revenues from cloud, digital services and online activities.

“The radical shifts we are seeing in social and business behaviour 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.”

The hyperscale data is based on analysis of the CAPEX and data centre footprint of 20 global cloud and internet service firms, including operators in IaaS, PaaS, SaaS, search, social networking and e-commerce.

In aggregate, the 20 companies generated 2019 revenues of almost $1.4 trillion, up 13% from 2018.

Read the latest from the Data Economy Newsroom: