Data Center CapEx grew at the fastest rate in three years in 1Q 2022

According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, networks, and data center IT industries, data center capex grew at the fastest rate year-over-year in three years in 1Q 2022. New cloud deployments and higher data center infrastructure costs drove capex.

“Data center capex grew double-digits year-over-year in 1Q 2022 despite persistent supply chain constraints,” said Baron Fung, Research Director at Dell’Oro Group. “However, growth was attributed to higher data center equipment average selling prices as vendors passed supply chain costs to end-users, and from the adoption of new server architectures and accelerated computing. We anticipate further upside in data center capex later this year, as the Top 4 cloud service providers expand their services and as server memory prices trend higher,” explained Fung.

Additional highlights from the 1Q 2022 Data Center IT Capex Quarterly Report:

• Worldwide data center capex growth expected to trend higher through 2022.
• Persistent supply chain challenges to limit server unit growth to high single-digits in 2022.
• The Top 4 US cloud service providers scheduled to launch services in more than 30 new regions in 2022.

CT Bureau