Global hyper-scale cloud vendors collectively forked out at least US$27 billion in capital expenditure (capex) over the three months ending March, an 80 per cent year-on-year increase, according to Synergy Research Group.
The industry analyst firm’s latest figures suggest that the world’s biggest cloud vendors are ramping up their spending on new data centre assets as the battle for scale among the top players heats up.
The latest quarterly figure comes after a full year that saw hyper-scale capex get to US$74 billion. According to Synergy, much of this hyper-scale capex goes towards building and expanding data centres, which have now grown in number to over 420.
Synergy said that the top five cloud infrastructure spenders consist of Google, Microsoft, Amazon Web Services, Apple and Facebook, although the relative ranking moves around each quarter. Together, these market leaders account for over 70 per cent of hyper-scale capex.
The analyst firm pointed out that capex levels at four of the big five were at an all-time high in the first quarter ending March, including a large one-off item at Google.
“2017 was a standout year for hyper-scale capex, but 2018 has started out with some staggering numbers,” Synergy Research Group chief analyst and research director John Dinsdale said.
“Our detailed quarterly market tracking has consistently shown strong growth in cloud services, SaaS, hyper-scale data centre footprint and spending on public cloud data centre hardware, but even so these capex numbers took us by surprise.
“We have long said that this is a game of scale in which most service providers cannot hope to compete; here is some of the clearest evidence yet,” he said.
Synergy’s research is based on analysis of the capex and data centre footprint of 24 of the world’s major cloud and internet service firms. This includes the largest infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and software-as-a-service (SaaS) providers, along with social networking and e-commerce firms.
As such, the other leading hyper-scale spenders identified by Synergy during the quarter were Alibaba, IBM, JD.com, NTT and Tencent, all coming within the top 10 tally by Synergy.
Other notable players further down below the top 10 ranking were Baidu, eBay, Oracle, PayPal, Salesforce, SAP, Yahoo Japan and Yahoo/Oath.