Google, Microsoft, Amazon, Apple, and Facebook were the top five spenders in Q4 2017.
Hyperscale operators are raking in the cash, with a capex totalling $22bn for Q4 – almost $75bn for the full year.
The figures represent a 19% growth rate over 2016.
Much of the capex goes on expanding the already huge data centres, which now number over 400, with the likes of Google, Microsoft, Amazon, Apple, and Facebook piling money back into growing their infrastructure.
That’s according to the latest report from Synergy Research Group, which found that these five companies account for over 70% of Q4 hyperscale capex.
On average these big five in aggregate spent over $13bn per quarter, with Amazon and Facebook with particularly strong capex growth in 2017. The amount being spent on growing these huge data centres goes some way to explaining the difficulty that IT service providers and telcos have had in competing with the leading cloud providers.
The US is hope to the vast majority of the hyperscale data centre operators, accounting for 44% in December 2017, China is next with 8%, with Japan and the UK tied for third place on 6%.
Outside of these five companies, the other big spender were Alibaba, IBM, Oracle, SAP, and Tencent. Alibaba capex more than doubled in 2017, whilst Oracle and SAP was above average.
Across all of the hyperscale operators, 2017 capex equated to just over 7% of total revenues.
“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.”