Dell'Oro Predicts That by 2027, Hyperscalers Will Account For 50% of Data Center Investment and Edge 8%

Global data center capital expenditure is expected to exceed $400 billion by 2027, according to market research company Dell'Oro Group. Dell'Oro claimed that hybrid cloud would create chances for the data center business to develop for both the hyperscale and enterprise sectors, even if hyperscalers will take the lead in that expansion. Although cloud hyperscalers will account for half of data center infrastructure investment by 2027, Baron Fung, research director at Dell'Oro Group, stated that there are considerable potential on-premises. 

Businesses will continually balance workloads between on-premises and multi-cloud environments as they optimize their IT infrastructures. A new industry will arise due to new applications' need for infrastructure at the edge. Future developments in faster computing, sustainability, and new server layouts will also make it possible for data centers to operate more efficiently. The research also predicts an increase in global data center capex of 11% by 2027. 

This month, Synergy Research Group, a rival analytical firm, estimated that corporations, hyperscalers, and telecom firms would spend $700 billion on IT. The percentage of hyperscale businesses in the total was 29%, the same as that of enterprises. In 2022, telco businesses made up the remaining 42%. 

Over the past six years, enterprise IT investment has increased by an average of 6% annually; telecom capex has remained steady, while hyperscale capex has climbed by an average of 20% annually. Since 2016, spending has grown by an average of 6% annually, according to Synergy.