Significant Shift in Buying Patterns of the Tier Two Cloud Causes Massive Fluctuations in the Supply Chain
 
PORTOLA VALLEY, Calif.  Nov. 7, 2019 — According to a newly released report issued by founding analysts of 650 Group, US Hyperscaler Cloud market revenue grew 26% Y/Y in 3Q19 while CAPEX used for DC Equipment grew with mid-teen Y/Y results.
 
650 Group’s Cloud Report covers Colocation, IaaS, SaaS, and Search & Social.
 
“3Q19 Hyperscaler results were robust with strong growth in revenue and data center build outs,” said Alan Weckel, founding analyst for 650 Group. “Hyperscalers buy a different class of equipment from a different set of suppliers from the rest of the market and 3Q19 results are showing those differences in vendor market shares. The significant slowdown in Tier 2 Cloud spending, with many Tier 2 Clouds relying more on Hyperscalers has changed the supply chain and how it is working beneath the Hyperscalers.”
 
Report Highlights:

• Tier 2 Cloud providers continue to lack scale and instead are relying on Hyperscalers instead of building out their own infrastructure
• Facebook CAPEX Guidance for 2019 is now $4B less than a year ago; 2020 projections up Y/Y
• Microsoft Azure won the coveted project Jedi award over Amazon AWS
• AWS remains 3X larger than any other IaaS competitor
• 400 Gbps continues to get pushed out; Hyperscalers are looking toward high-density 100 Gbps and/or 200 Gbps as an interim solution
• Supply chain supporting each hyperscalers continues to be significantly different and diverse
• We expanded the list of Cloud Providers we cover in the report
• Amazon and Microsoft continue to outgrow Facebook and Google
• Trade War causing more fluctuations in supply chain than Hyperscaler demand

 
The Cloud reports includes CAPEX studies for the Colocation, IaaS, SaaS, and Search and Social Media markets including unique look at spending specifically for data center equipment.  Going beyond just Cloud revenue provides a unique look into where and how the largest Cloud providers deploy equipment.  In the report, you can see the trend towards more CAPEX spending occurring in IaaS as many SaaS providers choose IaaS instead of building out their own infrastructure.

For more information about the report, contact the sales department at 650 Group at +1 650 600 7104 or val@650group.com or www.650group.com.
 
About 650 Group
650 Group is a leading Market Intelligence Research firm for communications, data center and cloud markets.  ​Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies.  650 Group focuses on leading edge market trends and research and prides itself on first to market research.

PORTOLA VALLEY, Calif.  August 8, 2019 —  According to a newly released report issued by founding analysts of 650 Group, US Hyperscaler Cloud market revenue grew 25% Y/Y in 2Q19 while CAPEX used for DC Equipment returned to growth with mid-teen Y/Y results.
 
650 Group’s Cloud Report covers Colocation, IaaS, SaaS, and Search & Social.
 
2Q19 Highlights:

• Data Center Capital Equipment Expenditures grew over 15% Y/Y
• Tier 2 Cloud providers shifting some spend away from their own build outs and towards US Hyperscalers
  
• Facebook lowered 2019 CAPEX projection for the second straight quarter
• Microsoft Azure continues to gain on Amazon AWS in the IaaS market
• White Box Switching, led by Accton, shows strongest Y/Y growth since 2017
• DRAM pricing continued to decline significantly on a sequential basis; capacity continued to surge
• AMD continues to grow market share in the Cloud

 
The Cloud reports includes CAPEX studies for the Colocation, IaaS, SaaS, and Search and Social Media markets including unique look at spending specifically for data center equipment.  Going beyond just Cloud revenue provides a unique look into where and how the largest Cloud providers deploy equipment.  In the report, you can see the trend towards more CAPEX spending occurring in IaaS as many SaaS providers choose IaaS instead of building out their own infrastructure.
 
“2Q'19 Cloud results rebounded strongly albeit with very mixed results,” said Alan Weckel, founding analyst for 650 Group. “Strong networking growth in 2Q19 remained 100 Gbps dominated with minimal 400 Gbps shipments. Strong commodity price declines remained in parts of the supply chain. Our forecast projections for the remainder of 2019 and early 2020 remain unchanged as we analyzed results and continue to expect uneven CAPEX growth amongst the US hyperscalers for the remainder of the year.”
 
About 650 Group
650 Group is a leading Market Intelligence Research firm for communications, data center and cloud markets.  ​Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies.  650 Group focuses on leading edge market trends and research and prides itself on first to market research.


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— Cloud market revenue expected to exceed $700B in 2022 as 650 Group First To Provide Comprehensive Analysis of Cloud Infrastructure + Services

PORTOLA VALLEY, Calif.  August 20, 2018 —  According to a newly released report issued by founding analysts of 650 Group, Cloud market revenue grew 36% Y/Y in 1Q18 to make for an $84B market. IaaS experienced the strong growth with 53% Y/Y growth. 2Q18 results are indicating significant sequential growth. 

Found in its first Cloud Report, 650 Group covers Colocation, IaaS, SaaS, and Search & Social.

1Q18 Highlights:

• Capital Equipment Expenditures (CAPEX) grew 62% Y/Y to $30 B, including total company CAPEX, Cloud CAPEX, and DC Equipment CAPEX separately. Spending was led by Amazon, Apple, Facebook, Google and Microsoft
• Search and Social revenue grew 31% Y/Y while CAPEX grew 128%
• SaaS revenue grew 41% Y/Y while CAPEX grew 16% Y/Y . The top four SaaS vendors are Microsoft, Salesforce, Oracle, and SAP.

The 650 Group Cloud Report includes CAPEX studies for the Colocation, IaaS, SaaS, and Search and Social Media markets including unique look at spending specifically for data center equipment. Going beyond just Cloud revenue provides a unique look into where and how the largest Cloud providers deploy equipment.  In the report, you can see the trend towards more CAPEX spending occurring in IaaS as many SaaS providers choose IaaS instead of building out their own infrastructure.

“The biggest Tech players define the cloud market, and considering its already robust size ($52B by just four companies), coupled with rapidly increasing adoption, it will continue to grow at a blistering pace up to 2022,” said Alan Weckel, founding analyst for 650 Group.  “The emphasis is on helping consumers, governments and businesses access resources, communications and entertainment, in addition to critical services, ranging from finance/insurance and retail, to manufacturing and healthcare. With CAPEX reaching 62% growth stemming from the largest providers, the cloud market represents a strong growth opportunity for network, storage, component, and optical vendors supplying data center compute and connectivity.”

About 650 Group
650 Group is a leading Market Intelligence Research firm for communications, data center and cloud markets.  ​Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies.  650 Group focuses on leading edge market trends and research and prides itself on first to market research.