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Amazon and Microsoft power 4Q21 webscale capex

Preliminary fourth quarter earnings results from the webscale segment of network operators (WNOs) indicates a continued strong appetite for data center and cloud investment. Companies reporting to date include Alphabet (Google), Amazon, Apple, Meta (Facebook), Fujitsu, IBM, Microsoft, Oracle, and SAP. For these 9 webscalers, CY2021 capex totaled $146B, up an astounding 32% YoY. Capex in 4Q21 for the same group was up 20% YoY. Amazon and Microsoft, the leading cloud providers, drove growth in both 4Q21 and 2021 overall. These preliminary results for 4Q21 are consistent with MTN Consulting’s forecast of $167.1B capex in 2021 for the webscale sector (up from $134.4B in 2020). Webscalers’ network spending outlook for 2022 is positive overall, driven by Meta (Facebook) and Alphabet (Google). Amazon’s total capex in 2022 is unlikely to rise but the network/IT component will be more prevalent. That’s due to Amazon’s continued expansion of its AWS regions to support the ongoing growth of this business, whose revenues grew 40% YoY in 4Q21 to $17.8 billion.

As cloud providers compete on footprint...

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Matt Walker
Chief Analyst
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