Saturday, March 3, 2018

Dell'Oro: Chinese cloud giant to overtake U.S. providers in server growth by 2022

The top three Chinese Cloud service providers – Alibaba, Tencent, and Baidu – are forecast to outpace the top four U.S. Cloud providers – Google, Amazon, Microsoft, and Facebook – in server growth by 2022, according to a new report from Dell'Oro Group.

Over the same period, Small/Medium Businesses (SMB) are accelerating their migration to Public Cloud, while large Enterprises – i.e., Fortune 1000 companies, which includes the Private Cloud – will revert to on-premises data centers.

Additional highlights from the Server 5-Year Forecast Report:

  • Server revenue is forecast to grow at a two percent five-year compound annual growth rate while server shipments are forecast to grow at four percent.
  • The top four U.S. Cloud providers are expected to continue to comprise approximately half of the server shipments over the forecast period. However, the growth rate declines as data centers increase in scale and efficiency.
  • The top three Chinese Cloud providers compose about 10 percent of the U.S. top four server shipments and we expect that portion to double by 2022.

“The Cloud providers have been rolling out new data centers at a pronounced rate, driving Cloud server shipments,” said Baron Fung, Senior Business Analysis Manager at Dell’Oro Group. “Furthermore, given the weakness in server shipments to Enterprises/Premises data center, we believe we are well on track to hit our projected crossover point as server shipments to the Cloud eclipse those to the Enterprise by the end of 2017. We expect server shipments to SMB to lead the decline as this sector embraces the Public Cloud. On the other hand, we expect shipments to large Enterprises to stabilize, and begin to grow modestly by the latter half of our forecast period,” Fung explained.

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