AI infrastructure spending will propel data center capex to over a half trillion dollars by 2027, according to a new report from Dell’Oro Group. However, the report predicts near-term cloud and enterprise capex growth to decelerate as the market undergoes digestion.
“Despite near-term data center capes growth headwinds as the major cloud service providers and enterprises optimize their infrastructure, forthcoming technology transitions will stimulate long-term growth,” said Baron Fung, Senior Research Director at Dell’Oro Group. “Most notably, the hyperscale cloud service providers will prioritize their investments toward accelerated systems for AI applications for both their public cloud platform and SaaS offerings. We will see continuous optimization across the entire data center stack, with the deployment of next-generation servers featuring high-core counts and deeper memory that are attached to next-generation networks. Meanwhile, the rest of the market will invest in accelerated systems more selectively, with most enterprises adopting a hybrid cloud strategy,” explained Fung.
Additional highlights from the July 2023 Data Center IT Capex 5-Year Forecast Report:
- * Worldwide data center capex is forecast to grow 15 percent by 2027.
- * Over 20 percent of the global server deployments in 2027 may be accelerated.
- * The edge computing forecast was trimmed as the ecosystem and compelling use cases have been slow to materialize.
