Executive Summary
The infrastructure services market is in the midst of a period of turbulence and transition. The macroeconomic conditions emerging in the post-pandemic period have caused organisations to retrench and take a more cautious approach to their IT procurement and this in turn has negatively impacted the sector’s demand profile.
The timing of all this is fitting. Various categories within the Internet infrastructure sector have reached a crossroads and the current environment is conducive to action. There is no question that operators have responded. They are taking the time to make hard decisions in order to find efficiencies and considering larger strategic moves. Investments and redirections of resources are being made to growth areas with upside, while legacy lines are managed at a minimum and optimised to maintain viability.
The shifting focus from legacy to next-generation was one of the recurring themes in the recent quarter. AI was top of mind for cloud platforms and data centre operators as they thought about how to adjust the way they design, build and operate in order to accommodate the demand that is coming in the near future. Meanwhile, the likes of Cloudflare and Akamai, which were originally built on the CDN business, continue to transform and push into areas where growth and profitability are not only the most attainable, but sustainable over the long-term.
This report takes a close look at the noteworthy trends and developments from the recent 1Q23 period. A more detailed look at the M&A landscape, APAC region, hyperscale and subscale cloud sectors is available to clients in separate quarterly reports
