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Synergy says Hyperscale operators invest strongly in data centers amid modest total investment

In the land of those who run superpower clouds, all are still relatively rosy in the garden. New data from Synergy Research shows that hyperscale operators’ CAPEX set a new record in the most recent quarter.

In total, more than $32 billion was deposited in the fourth quarter of 2019, beating the previous record set by the 418th quarter. Synergy noted that a lot of spending – and strategy – has been put into data centers. Capex specifically targeted data centers that rose 11% in 2019 in a move that ‘reflects the continued strength of their core business’, the analytics firm said.

The top five spending companies, far outscoring the rest of those spending higher, are Amazon, Google, Microsoft, Facebook, and Apple – though the following spender has plummeted in 2019 damaging overall figures. Under the old adage that attack is the best form of defense, the top 20 companies analyzed – including Alibaba, IBM, Oracle, and Tencent in the challenge section – generated $1.4 trillion in revenue for 2019, a 13 percent increase over 2018.

Hyperscale operators invest hard in data centres amid modest overall capex, says Synergy

However, the inevitable question surrounding what will happen in the context of the ongoing Covid-19 epidemic is not too far away. John Dinsdale, a key analyst at Synergy Research, says that while nothing is certain, hyper-proportional cloud players are in a firmer position than most.

“While there is much unknown, it is clear that hyperscale operators generate more than 80% of their revenue from the cloud, digital services, and online activities,” says Dinsdale. The fundamental changes that we are seeing in social behavior and business will actually provide some fundamental direction for many of these businesses.

Dinsdale added: “These ultra-high-end companies are far better to insert than current crises than most others and we expect to see strong investment going on.

Many top cloud players have the ability to put some of their resources into combating Covid-19, as well as providing free services to those who are researching and working in healthcare. Amazon Web Services pledged $20 million in support for customers working on diagnostic solutions, while Microsoft, Google, Alibaba, and others offered free products to healthcare professionals.

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2020 is a ‘bumper year’ for data center M&A – between Covid-19 – as value surpasses 2019 total

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