“While data center capex for the hyperscalers will decline significantly this year, we project some of the cloud service providers such as Microsoft and Google will continue to increase spending by double digits,” said Baron Fung, Senior Research Director at Dell’Oro Group.

In 1Q23, product growth was broad-based, but thermal management and cabinet PDU and busway grew at the fastest rates as a result of easing fan and breaker supply chain constraints. IT racks and containment was the only market segment with revenue growth to meaningfully decelerate.