The COVID-19 pandemic is hitting some industry sectors much harder than others. Who would want to be in the airline business right now, or tourism or construction?
But there are some potential tech sector beneficiaries: Those that cater for remote working or online entertainment seem better placed than most.
Digging deeper into supply chains, market research firm Dell'Oro has uncovered another potential tech bright spot: data center servers.
According to Baron Fung, research director at Dell'Oro, there will be a "steep decline" in enterprise IT spending due to severe near-term supply and demand disruptions from COVID-19.
"Enterprises," he said, "will seek to conserve capital during these uncertain times and resort to the cloud to satisfy near-term demand for digital services."
Fung expects that Tier 1 cloud service providers will consequently need to expand their infrastructure at a "measured pace to capture this incremental demand." In turn this will mean more spend, primarily on servers. A welcome development for the market, then, following what Dell'Oro called a "pause" on server spending last year.
The market research firm calculated that the top ten cloud service providers, in aggregate, spent US$66 billion on data center infrastructure during 2019 (a 3% annual increase), and that Amazon Web Services maintained a 50% cloud revenue share during the year (although Microsoft Azure and Google Cloud Platform apparently made some market-share gains).
Spending on servers, predicted Dell'Oro, will account for 47% of data center capex in 2020.
— Ken Wieland, contributing editor, special to Light Reading