Global data center spending is forecast to take a revenue hit following a 15% growth to $241 billion in 2022. Dell’Oro Group predicts this growth figure will slim to 8% growth this year.
Indeed the analyst firm said enterprises pouring their money into cloud and data center will be more cautious due to uncertain economic environment. Plus, future server architectural changes and advanced computing will shift the enterprise focus on long-term data center investments.
Cloud service provider giants hit the ground running in 2022 to meet enterprise demand — the top 10 took over 48% of the total global data center capex led by Dell, HPE and Inspur.
Yet, while “hyperscale cloud service providers have undergone a robust expansion cycle for three straight years,” according to Baron Fung, senior research director at Dell’Oro, “the market is due for a pullback.”
Enterprise demand will soften in certain sectors as cloud providers end expansion and switch focus to improving efficiencies — the market can expect to shift from a “supply-constrained environment to one that is oversupplied,” Fung said.