Hyperscale operator capex spend touches $150 billion

hyperscale operator capex

Reno, USA: Hyperscale operator capex spend has increased to $150 billion during the last four quarters. It was $121 billion in the previous four quarters reveals Synergy Research. The rise in capex spending indicates that hyperscale cloud operators are continuing to ramp up their infrastructure.

As per Synergy’s data, a major part of hyperscale operator capex goes towards building, expanding and equipping huge data centres, which grew in number to 625 at the end of Q1.

The data centre share of capex varies greatly quarter by quarter and from one operator to another. But on average, the data centre spending accounts for more than half of all hyperscale operator capex.

Amazon, Microsoft, Google and Facebook were the top four hyperscale spenders during the last four quarters. Their capex budgets were more than other hyperscale operators. Apple, Alibaba and Tencent followed those top four hyperscale operators in terms of spending.

Interestingly, Amazon and Microsoft continued with their spending during the four quarters. However, Google slightly had lowered the spending, while Apple increased capex spend in the last two quarters. Facebook, Alibaba and Tencent all continue to ramp up their spending according to Synergy Research.

Besides these top seven hyperscale operators, IBM, NTT, Oracle, JD.com, Twitter and Baidu are also among other hyperscale spenders.

Synergy’s hyperscale data takes into account the capex and data centre footprint of 20 major cloud and internet service firms. That includes the largest operators in IaaS, PaaS, SaaS, search, social networking and e-commerce.

These twenty companies generated over $1.7 trillion in revenues collectively during the last four quarters. The revenues grew 24% over the preceding four quarters.

“For hyperscale operators, the pandemic proved to be more of a stimulus to growth rather than a barrier. Over the last four quarters we continued to see extremely strong growth in revenue, capex and data centre spending,” said John Dinsdale, Chief Analyst – Synergy Research Group.

“As hyperscale capex levels keep on setting new records, it is in stark contrast with telcos whose capex has essentially been totally flat for five years now, mirroring their inability to grow overall revenues,” added Dinsdale.

“Given the ongoing growth in service revenues for hyperscalers and the ever-increasing need for a larger global data centre footprint. We are forecasting continued double-digit growth in hyperscale capex for several years to come,” concluded Dinsdale.

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