Market intelligence firm Dell’Oro Group has published its 3Q 2023 Data Center IT Capex Quarterly Report.
Amongst its key findings is the prediction that worldwide data centre capex will rebound to 11% growth in 2024. This is in line with select hyperscale cloud service providers returning to an expansion cycle as the spending freeze in the enterprise markets thaws.
Other key findings from the 3Q 2023 Data Center IT Capex Quarterly Report
The report also states that server and storage system revenue is forecast for growth greater than 20% in 2024, while network and physical infrastructure revenues grow single digits.
According to Dell’Oro, Dell led all OEMs in server revenue in 3Q 2023, followed by IEI Systems (formerly Inspur) and HPE. White box server vendors gained 8 points of revenue share year-over-year compared to the OEMs. Meanwhile, hyperscale cloud service providers are forecast to increase their data centre capex by 13% in 2024.
Baron Fung, Sr. Research Director at Dell’Oro Group says: “Worldwide data centre capex is projected for only a 4% growth in 2023. The slowdown in general-purpose server and storage deployments weighed down the market despite increased AI-related investments. While Microsoft, Google, and Oracle have increased their data centre investments in 2023 year-to-date, other cloud service providers such as Amazon and Meta have trimmed their data centre capex. Our outlook for 2024 is more optimistic. New AI applications such as generative AI will be a key investment driver in the cloud and enterprise. Furthermore, we anticipate demand for general-purpose servers to recover following a prolonged correction, and as customers make a transition to new server platforms that enable more efficient computing.”