Webscale Network Operators: 2Q19 Market Review - Webscale Capex in Distress with an 11% YoY Drop but R&D Investments Continue to Soar
|発行||MTN Consulting, LLC||商品コード||753492|
|Webスケールネットワークオペレーター(WNO) ：市場レビュー Webscale Network Operators: 2Q19 Market Review - Webscale Capex in Distress with an 11% YoY Drop but R&D Investments Continue to Soar|
|出版日: 2019年10月23日||ページ情報: 英文||
当レポートでは、：Webスケールネットワークオペレーター (WNO) に注目し、収益、Capex、R&D支出、セグメント別の収益、広告収入、およびサプライヤー契約数など、市場における主要統計を提供しています。
After spending big in 2018, global technology companies took a breather going into 2019. Annualized capex growth dipped to just 5% in 2Q19, a stark drop from the 48% annual growth recorded in 2018. In fact, webscale capex declined in the first two single quarters of 2019: down by 18% in 1Q19 and by 11% in 2Q19.
R&D investments, on the other hand, remained robust for webscale operators as most of the “Top 8” WNOs are exploring/deploying self-developed AI-based chips customized for their datacenters and moonshot projects such as driverless vehicles.
Webscale networks are centered around immense, “hyperscale” data centers and undersea cable systems that support network traffic from the tech companies' online retail, video, and social media platforms, along with cloud services. Webscale operators may also own access networks, typically using fiber, microwave or mmWave, and even fixed satellite. WNOs exploring outer space for providing connectivity include Amazon, Facebook, Alphabet, and Microsoft.
After surpassing $100B in annualized capex for the first time in 2Q18, the companies in this webscale network operator (WNO) sector invested $105.0B in the twelve-month ending 2Q19, up by a meagre 5% considering high double-digit growth rate in the previous year. The stall in capex spend meant the sector's cash & short-term investments increase by 12.7% YoY during the same period. Free cash flow margins also witnessed a strong uptick in 2Q19 compared to the previous quarter, on an annualized basis. A sub-group of important WNOs, the “Top 8”, continues to be important for tracking the sector. This group includes Alibaba, Alphabet, Amazon, Apple, Baidu, Facebook, Microsoft, and Tencent. Four of these accounted for at least 10% of total WNO capex in 1H19, and they are all based in the US: Alphabet, Amazon, Facebook, and Microsoft.
Webscale operators continue to branch into new markets, including hardware, both through R&D and acquisitions. M&A activity in the sector remained vigorous in 2018, with Alphabet, Amazon, Microsoft, Oracle, and Salesforce each recording sizable related costs. The M&A climate remains strong for the sector given its high cash reserves, even though 2019 has seen few big deals. Total debt for the sector is manageable overall, at $449.6B in June 2019 (cash & cash equivalents: $663.2B). Some individual companies could face debt issues in an economic downturn, however, or due to regulatory pressure. Facebook is clearly one of these, as it faces both high regulatory risk and gets almost all of its revenues from advertising.
MTN Consulting's ‘2Q19 WNO Market Review’ analyzes the network infrastructure spending and financial position of webscale network operators (WNOs).
WNOs are web-centric companies who own and operate large multi-country communications networks based upon hyperscale data centers and submarine cables. Webscale operators may also own access networks, typically using fixed satellite or fiber. WNOs own network assets in order to support their core businesses, which comprise digital advertising, online retail, cloud, digital media and content services, and other digital-based services. The webscale segment excludes companies with digital business models who rely primarily on rented cloud capacity or collocation space. Twitter, for instance, is not a webscale operator, as its network relies on a mix of rented space in carrier-neutral data centers and rented cloud resources from Google.
WNOs tracked in this report include the “Top 8” companies (Alibaba, Alphabet, Amazon, Apple, Baidu, Facebook, Microsoft, and Tencent) and 12 others: Altaba, ChinaCache, Cognizant, eBay, Fujitsu, HPE, IBM, JD.COM, LinkedIn, Oracle, SAP, and Yandex.