“While data centre capex for the hyperscalers will decline significantly this year, we project some of the cloud service providers such as Microsoft and Google will continue to increase spending by double digits,” said Dell’Oro’scBaron Fung, “meanwhile, the beginning of the year witnessed a slow start in enterprise IT spending, with revenues for the server and storage OEMs down Y/Y.”
”We anticipate that the demand will continue to deteriorate throughout the first half of 2023,” added Fung, “the lower demand environment will have an impact of slowing systems pricing growth, which could prompt customers waiting on the sidelines to resume spending later this year. In addition, the recent server platform refresh from Intel and AMD, and the growing demand on AI/ML applications, is expected to motivate customers to upgrade their infrastructure.”
The report found that:
- Server and storage systems will have revenue growth of 3% in 2023, while network and physical infrastructure will maintain double-digit revenue growth.
- Server shipments for server OEMs were down 20% y-o-y in 1Q 2023, while white box server vendors were up more than 20%.
- Top 4 US Cloud service providers on track to launch services in 14 new regions in 2023, a significant decrease from the 28 regions launched in 2022
See also: IBM plans European quantum data centre
