Executive Summary
The infrastructure services sector moved into the new year with justified optimism. The COVID-19 pandemic has thrown its best punches and the sector has stood in and withstood the barrage. Growth is healthy in the public cloud and hyperscale data centre space, while newer categories like managed third party cloud services and interconnection continue to rise. Infrastructure services with a more traditional orientation have hit bumps, but have also shown resilience and are pivoting to growth areas and tapping into the upside potential of the model.
With the pandemic starting to get under control in certain parts of the world and the macroeconomic environment showing signs of recovery, the sector is poised for a resurgence. And around the hyperscale value chain, there is plenty of reason to believe there is going to be a significant degree of acceleration. The pace of cloud adoption is picking up steadily and in emerging markets, the pandemic served as a needed spark.
How this plays out is the big question. We should expect a lot of differences across geographies and segments. APAC has seen a steady turnaround from the peak of the pandemic, although recent waves threaten to stall that. Vaccination rates in the US have allowed the economy to open up and things are kicking back into gear. This will push growth across the sector and those providers that have adapted and pivoted stand to gain further as many changes that are advantageous to Internet infrastructure are set to be part of the emerging new normal.
And that is the big theme moving out of the pandemic. Can providers continue to evolve and jump into growth areas? Can and will they tap into the upside potential of the market and maximize installed customer growth? Will they continue to find new ways to differentiate amid the continued rise of public cloud?
This report provides preliminary answers to these questions, while taking a closer look at the noteworthy trends and developments from the recent quarter. A detailed dive into the M&A landscape and SMB sector is available in separate quarterly reports.
