Research company Dell’Oro Group reported a decline in cloud capex during Q2, despite increased investments in AI infrastructure.
It stated the figure was down 2 per cent, without clarifying if this is consecutive or year-on-year. It noted Microsoft and Google remained in a capex expansion cycle, predicting double-digit growth from greenfield investments and refresh cycles.
Dell’Oro Group ranked Amazon, Google, Meta Platforms and Microsoft as the top-four cloud providers in the US, stating they remained on track to launch in 25 regions in 2023.
Baron Fung, senior research director, stated enterprise IT spending remained depressed, with revenue for server and storage OEMs down by double-digits year-on-year for the second consecutive quarter.
“We anticipate demand to gradually improve heading into 2024, driven by the introduction of new server platform refresh from Intel and AMD, as well as a shift towards accelerated computing for AI/ML applications.”
He noted “hyperscale cloud capex has been decelerating” as some leading providers “are overdue for a capex digestion”, highlighting spending on general-purpose infrastructure.
Dell led all OEMs in server revenue in Q2, followed by HPE and IEI Systems.
White box server vendors gained six points of revenue share on OEMs.