Hyperscale cloud operator capex topped $37 billion in Q3-2020, which easily set a new quarterly record for spending, according to Synergy Research Group (SRG). Total spending for the first three quarters of 2020 reached $99 billion, which was a 16% increase over the same period last year.
The top-four hyperscale spenders in the first three quarters of this year were Amazon, Google, Microsoft and Facebook. Those four easily exceeded the spending by the rest of the hyperscale operators. The next biggest cloud spenders were Apple, Alibaba, Tencent, IBM, JD.com, Baidu, Oracle, and NTT.
SRG’s data found that capex growth was particularly strong across Amazon, Microsoft, Tencent and Alibaba while Apple’s spend dropped off sharply and Google’s also declined.
Much of the hyperscale capex goes towards building, expanding and equipping huge data centers, which grew in number to 573 at the end of Q3. The hyperscale data is based on analysis of the capex and data center footprint of 20 of the world’s major cloud and internet service firms, including the largest operators in IaaS, PaaS, SaaS, search, social networking and e-commerce. In aggregate these twenty companies generated revenues of over $1.1 trillion in the first three quarters of the year, up 15% from 2019.
“As expected the hyperscale operators are having little difficulty weathering the pandemic storm. Their revenues and capex have both grown by strong double-digit amounts this year and this has flowed down to strong growth in spending on data centers, up 18% from 2019,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “They generate well over 80% of their revenues from cloud, digital services and online activities, all of which have seen COVID-19 related boosts. As these companies go from strength to strength they need an ever-larger footprint of data centers to support their rapidly expanding digital activities. This is good news for companies in the data center ecosystem who can ride along in the slipstream of the hyperscale operators.”
Separately, Google Cloud announced it is set to add three new ‘regions,’ which provide faster and more reliable services in targeted locations, to its global footprint. The new regions in Chile, Germany and Saudi Arabia will take the total to 27 for Google Cloud.
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