On average during 2017, the top five of Google, Amazon, Microsoft, Apple and Facebook in aggregate spent well over $13 billion per quarter. It is also notable that 2017 capex growth was particularly strong at Amazon and Facebook. Outside of the top five, other major hyperscale spenders include Alibaba, IBM, Oracle, SAP and Tencent. Among these five, Alibaba capex more than doubled in 2017, while growth at both Oracle and SAP was also above average. Other notables outside of the top ten include Baidu, eBay, JD.com, NTT, PayPal, Salesforce, Yahoo Japan and Yahoo/Oath.
“Over the last four years we have seen many companies try and fail to compete with the leading cloud providers. The capex analysis emphasizes the biggest reason why those cloud providers are so difficult to challenge,” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group. “Can you afford to pump at least a billion dollars a quarter into your data center capex budget? If you can’t, then your ability to meaningfully compete with the market leaders is severely limited. Of course factors other than capex are at play, but the basic financial table stakes are enormous.”
