Cloud Capex Forecasted to Revert to Stronger Growth by Late 2019

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Update time : 2019-06-19 12:01:00
“After a record 29 percent revenue growth last year, the Server market is off to a slow start with a modest one percent growth,” said Baron Fung, Director at Dell’Oro Group. “In this quarter, server unit shipments declined for the first time in five quarters, and growth in server average selling prices started to plateau as the refresh cycle winds down. Furthermore, the major Cloud Service Providers are slowing capex in aggregate to digest excess infrastructure capacity, resulting in fewer server purchases. Looking ahead, as the Enterprise continues to shift workloads to Public Cloud, we expect the Cloud Service Providers to resume capex growth to expand capacity by late 2019,” explained Fung.

Following are additional highlights from the 1Q 2019 Server Quarterly Report:

Dell ranked No.1 in vendor revenue share, followed by HPE, Inspur, Lenovo, Cisco, Huawei, and IBM.
Data center-related capex of the Top 4 Cloud Service Providers grew in the mid-single digits year-over-year.
White box servers, which are primarily deployed by the Top 4 Cloud, continued to gain share from the branded OEM vendors despite of a Y/Y decline.