Webスケールネットワークオペレーター (WNO) - 2020年第1四半期：景気後退の圧力にもかかわらず、Capexは前年比25％で回復、R&D支出は引き続き堅調
Webscale Network Operators - 1Q20 Market Review: Despite Recessionary Pressures, Webscale Capex Rebounded in 1Q20 with 25% YoY Growth while R&D Outlays Remain Robust
|Webスケールネットワークオペレーター (WNO) - 2020年第1四半期：景気後退の圧力にもかかわらず、Capexは前年比25％で回復、R&D支出は引き続き堅調|
発行: MTN Consulting, LLC
調査対象企業には、上位企業8社 (Alibaba、Alphabet、Amazon、Apple、Baidu、Facebook、Microsoft、Tencent) とその他の企業12社 (Altaba、ChinaCache、Cognizant、eBay、Fujitsu、HPE、IBM、JD.COM、LinkedIn、Oracle、SAP、Yandex) が含まれます。
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) による技術支出について調査分析し、2020年第1四半期に焦点を当てて、体系的な情報を提供しています。
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 network operators (WNOs) may also own access networks, typically using fiber, microwave or mmWave, and even fixed satellite. WNOs exploring outer space for providing connectivity include Amazon, Apple, Alphabet, Facebook, and Microsoft.
A broad set of vendors are benefiting from WNO capex, 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, Neophotonics, Lumentum, etc.), to contract manufacturers of white box/OCP servers such as Wistron and Quanta.
After a slow and cautious 2019, global webscale operators relaxed their control on spending, particularly capex. Capex spend surged by 25% YoY in 1Q20 - a strong recovery considering falloffs in three out of four quarters in 2019, which included significant declines of 17.5% and 11.4% during 1Q19 and 2Q19, respectively. The strong uptick in the latest quarter also contributed to growth in capex on an annualized basis, posting an overall increase of 1.1% in 1Q20. However, this did not contribute much to new data center construction, as WNOs spent more on new servers to keep up with the demand of remote access to cloud-based tools and services.
R&D investments also continued their robust growth journey as some WNOs continue to invest heavily in R&D projects across a wide spectrum - from self-developed AI-based chips customized for their data centers to more grandiose moonshot projects such as driverless vehicles. On an annualized basis, these investments clocked 16.9% YoY growth to post $160B for the 12 months ended March 2020, much higher than capex investments amounting $109.4B in the same period. Despite challenging times amid the COVID pandemic, the long-term growth story for the webscale sector looks intact. The surge in capex spend meant the sector's cash & short-term investments grew by 10.8% YoY in 1Q20 vs 11.2% in 4Q19. Annualized top line revenue growth in the sector also inched up to 12.5% in 1Q20, above the average annual rate of 10.8% during the 2011-19 period.
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 2019 - all based in the US: Alphabet, Amazon, Facebook, and Microsoft. Three out of the Top 8 WNOs, Apple, Facebook and Baidu, spent less on capex in 1Q20 than in 1Q19. For ecommerce-based WNOs such as Amazon, Alibaba, and JD.com, capex growth has been a reaction to the COVID-19 situation - their spending focused on fulfillment centers and supporting technology. Capex-related developments for other key WNOs are summarized below:
With respect to R&D spending, webscale operators continued spending more on R&D than capex; annualized R&D/revenues were 10.8% in 1Q20, ahead of the capex/revenues ratio of 7.4%. Webscale operators are plowing R&D funds into a broad range of tech projects, in both predictable areas like artificial intelligence and IoT, and less obvious areas like healthcare (Amazon and Google), food delivery (Alibaba), and connected cars/self-driving (Baidu). Many webscale operators are designing their own chips now, in potential competition with current suppliers; our "Webscale Playbook" series details these efforts.
Webscale operators continue to branch into new markets, including hardware, both through R&D and acquisitions. M&A activity in the sector posted a strong performance in the twelve-months ending 1Q20, with Alphabet, Amazon, Microsoft, and HPE each recording sizable MA costs. However, IBM's $34B acquisition of Red Hat stole the show during the twelve-month period. Webscale operators are also beginning to more actively partner with telcos on network projects, with Facebook's $5.7B splash on a stake purchase in Jio Platforms. Microsoft is also leading the way with recent big wins at AT&T and Jio in India. IBM, already a big supplier in the telco segment, will use its Red Hat acquisition to further these aspirations.
In June 2020, the International Monetary Fund (IMF) revised its forecast for the year, projecting global GDP to sink 4.9% in 2020 as a result of COVID-19 outbreak impact. For some WNOs, the current situation somewhat presents with a silver lining though, as lockdown measures across major economies have resulted in spike of remote access to cloud-based tools and services. For example, Microsoft's group-collaboration platform, Teams, grew from 32 million daily active users to 44 million in a single week in March 2020, amid the pandemic-induced remote working. The tech giant also saw a staggering 775% increase in cloud services usage. However, these tailwinds could be limited to the large WNOs with strong and sizeable cloud businesses and offerings - such as Microsoft, Amazon, and Alphabet.
Furthermore, operators with significant dependence on 'non-cloud' businesses and relatively smaller players will likely restrict their spend on webscale buildouts/data centers in 2020. They must prepare to counter the effects of supply chain and workforce disruptions until the pandemic subsides considerably. While 1Q20 saw capex growth to rebound sharply by 25% YoY, overall, such growth is unlikely to sustain into the next three quarters and is expected to end the year in the 8-15% range.
MTN Consulting's 1Q20 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. By contrast, Apple is webscale; although it has partnerships with GCP and AWS for cloud capacity, Apple owns several large data centers, and is building more.
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.