Webscale Network Operators: 3Q18 Market Review – ResearchAndMarkets.com

Network Operators: 3Q18 Market Review”
report has been added to ResearchAndMarkets.com’s

This report is focused on operators of Webscale networks (WNOs). WNOs
are web-centric companies whose operations and services rely heavily on
hyperscale data centers and supporting connectivity.

This WNO sector of companies invested $85.4B in capex in the first nine
months of 2018 (YTD18), up an astounding 56% YoY. Free cash flow margins
fell because of this, but Webscale sector cash on hand (including stock)
was relatively stable: $605.9B in Sept. 2018, from $609B in Sept. 2017.
The outlook remains strong for continued investment growth in this
sector, focused on data centers and international connectivity.

They typically have tens or hundreds of millions of customers/users, and
rely heavily on scale and network effects in quest for profitable
growth. Most WNOs build and operate data centers, but some rely largely
on rented/leased resources. Netflix, Snap and Twitter are notable
examples. Each of these spends heavily on cloud resources from other
providers and is a candidate to build organically in the future. Or,
purchase existing assets during a market adjustment.

WNOs tracked in this report include the “Top 8” companies (Alibaba,
Alphabet, Amazon, Apple, Baidu, Facebook, Microsoft, and Tencent) and
over 20 others: Altaba, Booking Holdings (formerly Priceline),
ChinaCache, Cognizant, eBay, Fujitsu, HPE, IBM, JD.COM, LinkedIn,
Netflix, Oracle, Qihoo 360, Salesforce.com, SAP, Sina, Snap, Sohu,
Twitter, Weibo, Xunlei, Yandex, and YY.

Data coverage: for 30 financial data series, our coverage timeframe is
1Q11-3Q18. For vendor contracts, the database begins in 2008, and is
updated through September 2018. This report includes “Network, IT &
software” capex estimates, by provider, as well as an analysis of 2017
advertising revenues by company.

The world’s largest technology companies are investing heavily in
Webscale networks. These are centered around enormous Webscale, also
known as “hyperscale”, data centers.

The WNO surge is not new. Webscale network operators (WNOs) invested
$78.6B in capital expenditures (capex) in 2017, up 16% from 2016. Since
2011, WNO capex has grown an average of 19% per year. Webscale capex is
now over 8% of revenues. Some WNOs, including Facebook and Alphabet,
have capital intensities in the 15-20% range, similar to the biggest
telecommunications network operators (TNOs). Further, nearly half of WNO
capex is for technology. In the YTD18 period, Network, IT and Software
amounted to 45% of total Webscale capex; that’s is down slightly from
46% the year prior.

A broad set of vendors are benefiting, from semiconductor players
selling into the data center market (Intel, Nvidia, Broadcom, etc), to
optical components & transport vendors selling into data center
interconnect markets (Ciena, Infinera, Oclaro, Neophotonics, Lumentum,
etc.), to contract manufacturers of white box/OCP servers such as
Wistron and Quanta.

Key Topics Covered:

1. Abstract

2. Analysis

3. WNO Market: Key Stats thru 3Q18

4. Top 8 WNOs

5. All WNOs: Company Drilldown

6. Totals by Company

7. About

Companies Mentioned

  • Alibaba
  • Alphabet
  • Altaba
  • Amazon
  • Apple
  • Baidu
  • Booking Holdings (formerly Priceline)
  • Broadcom
  • ChinaCache
  • Ciena
  • Cognizant
  • Facebook
  • Fujitsu
  • HPE
  • IBM
  • Infinera
  • Intel
  • JD.COM
  • LinkedIn
  • Lumentum
  • Microsoft
  • Neophotonics
  • Netflix
  • Nvidia
  • Oclaro
  • Oracle
  • Qihoo 360
  • Quanta
  • SAP
  • Salesforce.com
  • Sina
  • Snap
  • Sohu
  • Tencent
  • Twitter
  • Weibo
  • Wistron
  • Xunlei
  • YY
  • Yandex
  • eBay

For more information about this report visit https://www.researchandmarkets.com/research/j6zckk/webscale_network?w=4


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