Hyperscale operator CAPEX reaches $31bn in yet another “record-setting” year

The top 10 markets include Northern Virginia, Silicon Valley, Dallas, Chicago, New York/New Jersey, Singapore, Amsterdam, Los Angeles, Seattle and London

Hyperscale operator’s capital expenditure (CAPEX) in the third quarter has topped the $31bn mark, up 8% compared with Q3 last year.

CAPEX in the first two quarters of 2019 was down marginally compared to last year, so Q3 represents a significant return to growth, according to new data from Synergy Research Group’s Hyperscale Market Tracker research service.

For the first three quarters in aggregate, CAPEX is now ahead of the record-setting levels seen in 2018.

Last year, second-quarter data from Synergy Research Group showed that the CAPEX of hyperscale operators was up 59% from two years ago, “maintaining a record-setting start to the year”.

CAPEX in the first half of 2018 topped $53bn, compared with $31bn in the first six months of 2017.

The top five hyperscale spenders in Q3 2019 were Amazon, Google, Microsoft, Facebook and Apple, whose CAPEX budgets far exceed the other hyperscale operators, and was no different to the top five hyperscale spenders listed last year.

Four of them saw a big year-on-year increase in CAPEX spending in Q3, with Apple being the exception.


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Much of the hyperscale CAPEX goes towards building, expanding and equipping huge data centres, which have now grown in number to 504, according to Synergy.

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

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

“As expected there was a significant boost in CAPEX in the third quarter, after a couple of quarters that were relatively soft in comparison with the lofty heights achieved in 2018,” said John Dinsdale, a Chief Analyst at Synergy Research Group.

“Hyperscale companies are in growth mode and revenue growth rates remain in strong double-digit territory, with aggregated Q3 revenues up 14% over 2018. Amazon, Google, Facebook and Alibaba are all growing much more rapidly than that.

“These expanding companies are highly reliant on bigger and better data centre operations, which will drive continued growth in CAPEX levels.”

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