Global data center capex grew 7% in the first quarter of 2021, says Dell’Oro Group. The market research firm states in its latest Data Center Capex Quarterly Report that the quarter recorded the highest level of growth since the start of the pandemic a year ago. That said, cloud hyperscalers haven’t yet fully put their foot on the accelerator, and their capex growth isn’t expected to exceed 20% until the second half of the year.
“Capex on data center construction and network infrastructure returned to double-digit growth in 1Q21,” said Baron Fung, research director at Dell’Oro Group. “However, spending on servers grew marginally, with higher server average selling prices offset by the decline in unit shipments. We anticipate the cost of servers to continue to climb throughout the year, due to rising commodity and supply chain costs, adoption of accelerated servers, and ramp of the new servers based on the Intel Ice Lake processors.”
Despite these limitations, servers accounted for 39% of data center capex in the quarter. Top server vendors by revenue included Dell, HPE, and Inspur. White box server vendors lost share due to Cloud softness.
Overall, Dell’Oro predicts the Top 10 cloud service providers will increase their capex by 18% in 2021.
Dell’Oro’s Data Center Capex Quarterly Report covers the data center infrastructure capital expenditures of each of the 10 largest cloud service providers, as well as the “rest-of-cloud,” telco, and enterprise customer segments. Allocation of the data center infrastructure capex for servers, storage systems, and other auxiliary data center equipment is provided. The report also discusses market trends, drivers of the leading cloud service providers’ capex growth during the quarter, and the outlook for the next year.
For related articles, visit the Business Topic Center.
For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.
To keep abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.
Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
You can connect with Stephen on LinkedIn as well as Twitter.