Spending by hyperscale cloud service providers on innovative AI-based solutions is set to soar next year, supporting the digital ambitions of their customers, a leading analyst has predicted.
Independent research firm the Dell’Oro Group said that spending on cutting edge data centre facilities will rise by at least 30% next year. New investment by the cloud sector will be enabled by an easing of supply chain constraints and tailwind growth in demand for the services it supplies.
“We predict the major cloud service providers to enter an expansion cycle in 2022,” said Baron Fung, Research Director at Dell’Oro Group. “The Top 10 cloud service providers are planning to launch new data centers in more than 30 regions next year and will increase their investments on new server architectures and network upgrades. Cloud service providers will also increase spending on AI infrastructure, enabling enterprises to deploy applications with enhanced intelligence and automation, and lay the foundation for the metaverse.”
Fung also forecast that worldwide data center capex will grow 17% in 2022, with server unit shipments expected to return to double-digit growth as markets open up post-pandemic. Data center capex for each of the four biggest cloud service providers – Amazon, Google, Meta and Microsoft – is projected to surpass $20 billion in 2022.