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Addison Snell Laura Segervall Christopher G. Willard Ph.D. Worldwide Hyperscale Market Model: 2018 Revenue and Future Outlook

 

EXECUTIVE SUMMARY

This Intersect360 Research report presents the 2018 total market model and future outlook for the overall Hyperscale market, segmented into market tiers. Tiers are determined by total estimated annual IT spending on Hyperscale infrastructure: Tier 1, over $1 billion per year; Tier 2, $100 million to $1 billion per year; Tier 3, $1 million to $100 million per year. Organizations spending under $1 million per year are not considered to be part of the Hyperscale market in this methodology.

We give our historical assessment of the Hyperscale market for 2016, 2017, and 2018, by tier, with year-over-year growth rates. We also give our outlook for the Hyperscale market in the coming years, as well as advice to vendors for addressing the different tiers. Because the Hyperscale market is comprised of relatively few companies, particularly in the top tiers, we do not provide a specific five-year growth rate and forecast, but rather our qualitative assessment of direction.

Although Hyperscale implies very large infrastructure, it is important to note that these web-based core processes exist across a broad range of organization sizes, generating a corresponding range of requirements for information technology products and services. Organizations enter the Hyperscale arena when an application scales beyond standard IT solutions and capabilities and leads to the adoption of specialized internet-facing solutions.

  • Web search and categorization
  • Online retail and customer identification
  • Content hosting and distribution
  • Social media
  • Communication services
  • Cloud application services
  • Pattern recognition
  • Massively multiplayer online games (MMOGs)
  • Machine learning, artificial intelligence, cognitive computing

The total worldwide Hyperscale market amounted to $57 billion in IT spending in 2018. This represented 30% growth from 2017. Furthermore, the Hyperscale market consolidated further into the top tier, organizations spending over $1 billion annually on IT for Hyperscale infrastructure. Beginning in 2019, we believe the Hyperscale market has completed most of its initial expansion phase and is now predominantly driven by consolidation. Growth will continue, but we expect it to moderate down from high growth seen in recent years. Even at these lower growth rates, it is reasonable to project that the Hyperscale market could eclipse the $100 billion mark within five years.

 

TABLE OF CONTENTS

  • INTRODUCTION
  • What Is Hyperscale?
  • What Makes Hyperscale “Hyper”?
  • Hyperscale and Business Computing
  • Hyperscale and HPC
  • How Hyperscale is Unique
  • Hyperscale Vertical Markets
  • Table 1. Hyperscale Vertical Markets
  • WORLDWIDE HYPERSCALE SPENDING IN 2018
  • Table 2: Total Hyperscale IT Spending ($B), 2016 to 2018, by Market Tier
  • Figure 1: Total Hyperscale IT Spending ($B), 2016 to 2018, by Market Tier
  • FUTURE OUTLOOK FOR HYPERSCALE
  • Forecast and Future Market Dynamics
  • Advice to Vendors
  • APPENDIX A: HYPERSCALE MARKET SIZING METHODOLOGY
  • APPENDIX B: MARKET DRIVERS AND DAMPERS
  • Market Drivers
  • Market Dampers
  • Barriers to Entry

 

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