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Q1'20 Data Center Equipment CAPEX for the US Hyperscalers Take Different Directions as World Changes Consumption Models

05/05/2020 | 02:02pm EDT

Surge Spending and Different Usage Patterns Change 2020 and 2021 CAPEX Trends

PORTOLA VALLEY, Calif., May 05, 2020 (GLOBE NEWSWIRE) -- According to a newly released report issued by founding analysts of 650 Group, the US Hyperscaler Cloud market revenue grew 20% Y/Y in Q1’20 while CAPEX used for Data Center Equipment grew unevenly during the same timeframe.

650 Group’s Cloud Report covers Colocation, IaaS, SaaS, and Search & Social.

Q1’20 Highlights:

  • Revenue Growth for US Hyperscalers was the slowest it has been in a decade
  • The majority of Cloud Providers lowered CAPEX projections for 2020
  • US Hyperscaler Cloud providers are running their servers and networks more efficiently compared to 2019, allowing them to surge capacity at a faster rate than DC buildouts
  • Surge capacity in Q1’20 was very different between Search and Social companies like Facebook and Google and IaaS companies like Amazon and Microsoft.
  • Capital Equipment Expenditures were constrained by supply constraints related to COVID-19; supply constraints remain in 2Q’20

The Cloud reports include CAPEX studies for the Colocation, IaaS, SaaS, and Search and Social Media markets, including a unique look at spending specifically for data center equipment.  Going beyond just Cloud revenue provides a unique look into where and how the largest Cloud providers deploy equipment.  In the report, you can see the trend towards more CAPEX spending occurring in IaaS as many SaaS providers choose IaaS instead of building out their own infrastructure.

“Q1’20 Cloud results diverged from normal seasonality as the world rapidly shifted to work-from-home and remote forms of social and society interaction,” said Alan Weckel, founding analyst for 650 Group. “Cloud-based companies became increasingly important to society as social norms changed rapidly during Q1’20.  For businesses, the use of Cloud services becomes even more important in all verticals.  As we look towards the second half of 2020, companies that better use cloud resources to do business will emerge in a stronger position.”

For more information about the report, contact the sales department at 650 Group at +1 650 600 7104 or val@650group.com or www.650group.com.

About 650 Group
650 Group is a leading Market Intelligence Research firm for communications, data center, and cloud markets.  ​Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies.  650 Group focuses on leading-edge market trends and research and prides itself on first to market research.

Media Contact:
Greg Cross

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ę GlobeNewswire 2020
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