REDWOOD CITY, Calif. – March 16, 2023 – According to a recently published report by Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, global data center capex grew 15 percent to $241 billion in 2022. However, we project cloud and enterprise data center spending to decelerate to single-digit growth in 2023.
“The hyperscale cloud service providers have undergone a robust expansion cycle for three straight years while navigating through a supply constraint environment,” said Baron Fung, Senior Research Director at Dell’Oro Group. “Enterprises also increased their IT spending from digital transformation initiatives. However, the market is due for a pullback as the hyperscalers are at the end of their expansion cycle and seek to improve efficiencies, and the enterprises will scrutinize expenditures more carefully in an uncertain economic environment. Thus, shifting from a supply-constrained environment to one that is oversupplied as demand softens in certain sectors,” explained Fung.