Cloud data center capex is 17% higher year-over-year (Y/Y) in 2Q 2020 as the Cloud service providers expanded server capacity, according to a new report from Dell’Oro Group. Meanwhile, Enterprise IT spending remains depressed.
“The major U.S. and China-based Cloud service providers have accelerated expansion of server capacity to meet the demands of remote work and learning,”said Baron Fung, Research Director at Dell’Oro Group. “However, signs of a digestion cycle of lower growth in the second half 2020 may be imminent as the recent build-up is potentially leading to Cloud capacity and component inventories in excess of demand,” explained Fung.
Additional highlights from the 2Q 2020 Data Center Capex Quarterly Report:
The Top 10 Cloud service providers projected to return to double-digit Y/Y growth in 1H 2021.
Worldwide Server revenue grew 10 percent Y/Y, driven by 1.3 million units of white box servers to the Cloud.
