In the land of the hyperscale cloud operators, all remains relatively rosy in the garden. New data from Synergy Research shows that hyperscale operator capex set a new record in the most recent quarter.
In total, more than $32 billion was laid down in the fourth quarter of 2019, beating the previous record set by Q418. Synergy noted that a lot of spend – and strategy – was going into data centres. Capex specifically targeted at data centres grew 11% in 2019 in a move which ‘reflected ongoing strength in their core business operations’, as the analyst firm put it.
The top five spenders, far ahead of the rest of the hyperscalers, are Amazon, Google, Microsoft, Facebook, and Apple – although the latter dropped off sharply in 2019 to the detriment of overall figures. To the old adage that attack is the best form of defence, the top 20 companies analysed – including Alibaba, IBM, Oracle and Tencent in the challengers section – generated $1.4 trillion between them in revenues for 2019, up 13% from 2018.
Yet the inevitable question around what will happen amid the ongoing Covid-19 pandemic is not too far away. John Dinsdale, a chief analyst at Synergy Research, said that while nothing was certain, hyperscale cloud players were on a surer footing than most.
“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,” said Dinsdale. “The radical shifts we are seeing in social and business behaviour 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,” added Dinsdale.
Many of the leading cloud players are in a position to funnel some of their resources into combating Covid-19, as well as provide free services to those researching and working in healthcare. Amazon Web Services is committing $20 million to customers working on diagnostics solutions, while Microsoft, Google, Alibaba and others have offered free products to healthcare professionals.
