ICT Capex (capital expenditure) of seven webscale companies such as Alibaba, Alphabet, Amazon, Baidu, Facebook, Microsoft and Tencent will grow at a 19.5 percent CAGR to over $42 billion in 2021.
Leading webscale companies will continue the build out of their data center footprints globally to support their cloud service business as well as their digital services initiatives, according to Technology Business Research.
The report said strong Capex related spend in the webscale space is driving enterprise networking and IT services vendors to target this webscale companies to offset lower spend by telecom operators.
Technology giants such as IBM, Cisco, Dell, Oracle, HPE, among others are looking for business from webscale companies.
Internet content companies will re-examine their costly business for all programs. They will partner with stakeholders of the telecom industry to facilitate the development of ecosystem.
Webscale companies will avoid competition with telecom operators in the connectivity space.
“Their partnership models could include revenue-sharing deals and they will pursue new models to ensure joint investments,” said Chris Anlitz, telecom analyst at TBR.
Social media network Facebook is taking the approach of sharing.
Alphabet will shift its current stance to align with this thinking as well, particularly as its own the network broadband access play proves to be more costlier and challenging to pursue.
Alphabet is likely to continue investing in its Access unit as a means of experimenting with new business models and technologies.