LightTrends

 

Infrastructure Spending of the Cloud Companies Sets a New Record and Deployments of 100GbE Optics in Mega Data Centers Pick up Steam

 

LightCounting releases Quarterly Market Update Report.

 

Infrastructure spending by 16 leading cloud companies grew by a whopping 54% in Q1 2016 compared to Q1 2015, after taking a breather in the latter half of 2015. Alibaba, Alphabet(Google), Amazon, Apple, Baidu, Facebook, Microsoft, Twitter, Yahoo, and seven other major Internet-based businesses spent a total of $14.5 billion on property, plant, and equipment in Q1 2016, 20% more than the old record set in Q4 2014.


Source: Public financial reports

Apple, Facebook, and Tencent more than doubled their spending compared to Q1 2015, reaching all-time highs. Microsoft also spent more than ever before, with an outlay of $2.3 billion. Amazon, eBay, LinkedIn, and Microsoft all increased spending by double-digit growth rates, while Alphabet, Baidu, Twitter, and Yahoo went against the trend and curbed spending somewhat versus 1Q15 levels.

While property, plant, and equipment includes a wide range of purchases outside data centers and networks, the upward trend carried over into optical networking. Increased DCI spending by the leading cloud players helped to drive record growth in 100G DWDM ports. Cisco and Juniper reported a significant increase in router sales to cloud companies, also contributing to very strong demand for client-side 10km reach LR4 100GbE optics.

Shipments of 100m, 0.5km and 2km 100GbE optics to cloud companies also picked up in early 2016, but sales remained modest in comparison with 100GbE LR4. Several suppliers interviewed by LightCounting reported a sharp increase in purchases of these products by cloud companies in June 2016 and expectations are very strong for the second half of the year.

LightCounting’s report on Mega Datacenter Optics, published in March 2016, forecasts that sales of 100GbE optics to cloud companies will reach $300 million in 2016. The latest market data supports these findings, but the product mix will remain volatile.

Detailed estimates on shipments of 100GbE optics in the first half of 2016 are presented in LightCounting’s Quarterly sales database, released along with the Market Update Report. The database also includes historical data on quarterly shipments and pricing of more than 100 products in 2014-2015. More than 20 leading optical transceiver suppliers contributed data to this report.

The report also presents analysis of revenue and spending trends of top-tier telecom and Internet service providers, and financial results of telecom and datacom equipment vendors, including the market shares of the leading suppliers of 100G DWDM transport equipment.

For more information on the report, please click here.

 

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LightCounting is a leading optical communications market research company, offering semiannual market updates, forecasts, and state-of-the-industry reports based on its analysis of primary research with dozens of leading module, component, and system vendors as well as service providers and other users. LightCounting is the optical communications market’s first choice source for the accurate, detailed, and relevant information necessary for doing business in today’s highly competitive environment. For more information, visit: www.LightCounting.com or follow us on Twitter at @LightCounting.