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Much of the hyperscale capex goes towards building, expanding and equipping huge data centers, which grew in number to 512 at the end of Q4. 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 2019 revenues of almost $1.4 trillion, up 13% from 2018.
“As expected there was a significant boost in hyperscale operator capex in the second half of 2019, which helped to counter a relatively soft start to the year. Most notable was that annual spending on data centers grew at a double-digit rate despite total capex being somewhat flat,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “How will coronavirus impact this trend going forwards? While there are many unknowns, what is clear is that the hyperscale operators generate well over 80% of their revenues from cloud, digital services and online activities. The radical shifts we are seeing in social and business behavior will actually provide some substantive tailwinds for many of these businesses. These hyperscale firms are much better insulated against the current crisis than most others and we expect to see ongoing robust levels of capex.”
