Global data center capex decelerates to 8% year-over-year (Y/Y) growth in 1Q 2023 with softness emerging in the enterprise IT market, and with some of the hyperscalers entering a capex digestion cycle, according to a new report from Dell'Oro Group.
“While data center capex for the hyperscalers will decline significantly this year, we project some of the cloud service providers such as Microsoft and Google will continue to increase spending by double digits,” said Baron Fung, Senior Research Director at Dell’Oro Group. “Meanwhile, the beginning of the year witnessed a slow start in enterprise IT spending, with revenues for the server and storage OEMs down Y/Y. We anticipate that the demand will continue to deteriorate throughout the first half of 2023. The lower demand environment will have an impact of slowing systems pricing growth, which could prompt customers waiting on the sidelines to resume spending later this year. In addition, the recent server platform refresh from Intel and AMD, and the growing demand on AI/ML applications, is expected to motivate customers to upgrade their infrastructure,” explained Fung.
Additional highlights from the 1Q 2023 Data Center IT Capex Quarterly Report:
- Server and storage systems revenue forecast declines to 3 percent growth in 2023, while network and physical infrastructure maintain double-digit revenue growth.
- Server shipments for server OEMs were down 20 percent Y/Y in 1Q 2023, while white box server vendors were up more than 20 percent.
- Top 4 US Cloud service providers on track to launch services in 14 new regions in 2023, a significant decrease from the 28 regions launched in 2022.
https://www.delloro.com/news/global-data-center-capex-decelerates-to-8-percent-growth-in-1q-2023/
