Under the influence of the COVID-19 pandemic, demand for data center services is strong, driving data center network operators to continue to invest in capacity expansion. It is predicted that from 2020 to 2024, cloud and managed service provider capital expenditures should grow at a compound annual growth rate (CAGR) of 15.7%, and reach 180 billion US dollars at the end of the forecast period.
Analyst Alan Howard said: “Based on the available evidence and data, data center capital expenditures will continue to grow to meet expected demand. However, investment trends in different market segments are not moving forward smoothly. For example: IT infrastructure Expenses are affected by update cycles, trade regulations, and supply chain issues; physical infrastructure is also affected by construction cycles, data center space availability, and IT equipment deployment time."
Despite these potential limitations, most of the capital expenditure is spent on IT equipment, including servers, storage, and networking and other equipment, and physical infrastructure equipment. It is expected that the IT category will account for 71.5% of total capital expenditures this year, while physical infrastructure equipment will account for 19.5%, and land and construction expenditures will account for the remaining 9%.
