Enterprise and Consumer’s Use of Cloud Resources Changing to the New Normal because of COVID-19

PORTOLA VALLEY, Calif.  Aug. 5, 2020 —  According to a newly released report issued by founding analysts of 650 Group, US Hyperscaler Cloud market revenue grew 11% Y/Y in 2Q’20 while the supply chain for Data Center Equipment into Hyperscalers performed unevenly due to shifting lead times and trade war impacts.

650 Group’s Cloud Report covers Colocation, IaaS, SaaS, and Search & Social.

2Q’20 Highlights:
* o    Search and Social revenue growth was uneven based on the change of viewing habits of consumers from COVID-19 as advertisers and consumers shifted behavior significantly during the quarter
* o    IaaS revenue growth was robust led by most surge capacity placed in IaaS companies' infrastructure instead of their own build-outs
* o    Four of the five largest hyperscalers are under US government scrutiny for monopolistic behavior
* o    Market capitalization is averaging over $1 Trillion for this group of companies
* o    Supply constraints remain in 3Q’20 related to COVID-19 and trade war events
* o    Hyperscalers are poised to ramp next-generation server and networking architectures over the next two years
* o    US hyperscaler revenue is nearly 10X the size compared to Chinese hyperscaler revenue in 1H’20
* o    US hyperscaler influence on the supply chain is increasing

The 650 Group Cloud Reports include CAPEX studies for the Colocation, IaaS, SaaS, and Search and Social Media markets, including a 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.

“2Q20 IaaS cloud hit a record, far exceeding 4Q’19’s previous revenue record and over twice the revenue from just three years ago,” said Alan Weckel, founding analyst for 650 Group. “US trade war activities, mainly against Huawei, caused significant lead time increases in many critical components for cloud data center build-outs during the quarter as the 5G battle against China is having ripple effects into the cloud supply chain.”

About 650 Group 650 Group (www.650group.com) 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 with over 12 research programs focused on Cloud trends.

— 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.