Description
The hyperscale cloud sector continues to push forward and has reached a certain degree of stabilization amid improved macroeconomic conditions and a healthier enterprise buying environment. The interest in AI and value-add services is a key contributor to the acceleration in growth of late and the uptake above the raw infrastructure layer is flowing through to the bottom-line. Scale and scope continues to kick in and operational efficiency for the hyperscalers shows consistent, incremental improvement.
The outlook for the sector continues to play out in the numbers. Top-line revenue growth and operating margins are climbing and CapEx is on an explosive upward trajectory. The hyperscalers are building for the next generation of workloads, fuelled by AI, and have clearly decided they would rather over-invest than be caught having under-invested and left out of the value chain. What is coming is a generational shift in the computing landscape and the public cloud hyperscalers are determined to be at the centre of it and get a fair share of the pie.
The ongoing imbalance between demand and supply is another strong indicator for the sector’s current health. This situation looks like it will be around for some time and is being exacerbated by the constraints around land and energy, and supply chain issues for data centre equipment and server infrastructure and networking gear. This will take some time to work itself out, and there will be ebbs and flows, but there is no question that cloud has become the dominant computing model and will be home to everything new that is being built. Overall demand and the stability and legitimacy of the public cloud model has never been stronger and ensures a positive growth trajectory for the sector.
This report provides comprehensive growth rate projections and total revenue estimates for the world’s seven hyperscale cloud platforms on a five-year basis. Included are geographic splits and a total market summation. This latest version also features a refresh of our hyperscale cloud region and interconnection node tracking. We have upped our projections again and have hyperscale cloud projected to reach $714.7b in value in 2029, with a five-year CAGR of 26.1%. The five-year CAGR has fallen in the 21-24% range over the last few years, but is set to continue climbing as market conditions change and AI starts to gain significant forward momentum.
