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Hello,
Thanks for your interest in our latest research. You can view a summary of our latest report below.
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Revenues for the webscale sector of network operators ended 2021 at $2.14 trillion. That’s up 25% from 2020, and nearly 3x the total recorded in 2011. One reason for this is a dramatic uptick in cloud services revenues: cloud revenues for the top 3 (AWS, GCP and Azure) climbed 42% YoY, to $120.3B (per MTN Consulting). Still, this accounts for less than 6% of total webscale sector revenues. Larger factors behind 2021's growth include: digital ad revenues for Alphabet and Facebook (Meta); ecommerce sales at Amazon, JD.Com, and Alibaba; and, 5G device revenue sales at Apple. The webscale sector is now comfortably larger than telecom, which recorded just under $1.9 trillion in 2021 revenues.
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On a capex basis, telecom remains far ahead, with nearly $325B in 2021 annualized capex, or nearly double the webscale total of $175B. But webscale is gradually bridging this gap: in 2021, webscale capex spiked 30% YoY, versus an approximate 10% rise for telco capex. Capex in 4Q21 for webscalers was $50B, up 23% YoY. Webscalers also invest heavily in R&D, and have bleeding-edge requirements for the technology they deploy in their network. That has led them to drive the creation of many new innovations in network infrastructure over the last few years. These span semiconductors, optical transmission and components, intent-based routing, network automation, and other areas. Facebook (Meta) is perhaps the most influential of all webscalers due in part to its openness and support for the OCP and TIP organizations.
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Asia Pacific records best recent revenue growth in 2021
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Regionally, the strongest growth in 2021 was in Asia Pacific, where revenues grew 29% YoY. The more mature Americas region lagged, with growth of just over 21% YoY. That pushed Americas down to about 44% of global webscale revenues, from 45% in 2020. Asia Pacific follows, with a 36% global revenue share, then Europe (17%) and MEA (3%). The Americas still account for the majority of webscale capex...
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Best regards,
Matt Walker
Chief Analyst
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