Hyperscale Computing Capex Should Grow 20% in 2021; Communications by at Least that Much

Investments in hyperscale data center computing capabilities drives demand for wide area network communications, since, by definition, all that computing requires connections to remote end users. And based simply on growth of computing capabilities, hyperscale communications demand should rise at least 20 percent in 2021.

Public infrastructure as a service and platform as a service, for example, are expected to grow about 29 percent in 2021, according to Synergy Research Group.

source: Synergy Research 

Hyperscale cloud data center capital spending is forecast for 20 percent growth in 2021 by

Dell’Oro Group, Global data center capex was $187 billion in 2020, unchanged from the prior year. Keep in mind, however, that capex includes items other than servers and computing software. 

But industry rules of thumb suggest that 60 percent to 80 percent of total capex spent by a hyperscaler goes for computing investments. 

Global server unit shipments declined four percent year over year in the fourth quarter of  2020, including enterprise sales of all types. Enterprise data center capex is projected to grow six percent in 2021.

source: Statista

Bank of America forecasts 2021 hyperscaler data center capital spending by Alibaba Group , Baidu, and Tencent Holdings,  Microsoft, Google, Facebook and Amazon will rise 20 percent to $128.3 billion.