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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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This report reviews the growth and development of the webscale network operator (WNO) market since 2011. In the most recent 12 months (4Q22-3Q23), webscalers represented $2.32 trillion (T) in revenues (+3.7% YoY), $289 billion (B) in R&D spending (+13.1% YoY), and $192B in capex (-3.8% YoY). They had $710B of cash and short-term investments (+16.2% YoY) on the books as of September 2023, and $562B in total debt (+3.1% YoY). Webscalers employed approximately 4.099 million (M) people at the end of 3Q23, slightly up from 2Q23 but down 1.6% from September 2022.
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Technology spending: R&D still rising, capex growth pauses
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In 3Q23, webscalers spent $48.0B and $72.2B on capex and R&D, respectively.
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For capex, the result represents the second consecutive 9% YoY decline. We have already issued a revised forecast alert, and expect full year capex to come in about 5-10% lower than projected. None of the key webscalers are in trouble, and all expect future growth in capex, with generative AI an additional driver for investment. For R&D, actual spending in 3Q23 was 4.7% higher than 3Q22; however, for once R&D spend grew more slowly than revenues, pushing 12 month R&D intensity down slightly, to 12.4% of revenues. Generative AI is...
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Best regards,
Matt Walker
Chief Analyst
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