Hyper-scalers are known to have spent about US$ 185 billion in the last few years on data centres alone. These are the kind of organizations that work on mass scale, and today are engaged in humongous quantities of data warehousing. The group consists of Facebook, Amazon, Apple, Microsoft and Google. The Microsoft Azure and the Amazon Web Services have seen their quarterly revenues rise by 90 and 40% respectively, showcasing their massive growth trajectory and dominance of scale. A lot of spending is also being done by them on capital investments. These data centres need to be deployed with much consideration across the geographies. The changing customer landscape needs to be understood along with the effect of the same on suppliers. Margin compression and inaccurate demand forecasting are inevitable challenges. To win across segments, hyper- scalers need to ensure that their investments in manufacturing and for business research and development has to be more balanced. Someone has to assume technological leadership. Beyond being merely a vendor, some of these data centres will need to get integrated as strategic partners.

Source:https://www.mckinsey.com/industries/high-tech/our-insights/how-high-tech-suppliers-are-responding-to-the-hyperscaler-opportunity

Uploaded Date:13 February 2019