Data centre capex is forecast  to grow 11% in 2024 as select hyperscale cloud service providers return to an expansion cycle and the spending freeze in the enterprise markets thaws, says Dell’Oro..

“Worldwide data centre capex is projected for only a 4% growth in 2023,” says Dell’Oro’s Baron Fung, “ the slowdown in general-purpose server and storage deployments weighed down the market despite increased AI-related investments. While Microsoft, Google, and Oracle have increased their data centre investments in 2023 year-to-date, other cloud service providers such as Amazon and Meta have  trimmed their data centre capex.”

“Our outlook for 2024 is more optimistic,” added Fung, “AI applications such as generative AI will be a key investment driver in the cloud and enterprise. Furthermore, we anticipate demand for general-purpose servers to recover following a prolonged correction, and as customers make a transition to new server platforms that enable  more efficient computing.”

Server and storage system revenue is forecast for growth greater than 20 percent in 2024, while network and physical infrastructure revenues grows single digits.

Dell led all OEMs in server revenue in 3Q 2023, followed by IEI Systems (formerly Inspur) and HPE. White box server vendors gained 8 points of revenue share year-over-year compared to the OEMs.

The hyperscale cloud service providers are forecast to increase their data centre capex by 13 percent in 2024