As WNOs have grown, they’ve developed more sophisticated offerings in the cloud, often targeting specific vertical markets with customized platforms, including telecom. This is impacting how telcos build their networks and develop services. In the last year, webscale partnerships with telcos have expanded, spanning workload shift, joint development, and service partnerships – often supporting 5G. In January, our research partner MTN Consulting flagged the need for more collaboration between telcos, WNOs, and carrier-neutral providers as essential for 5G success as telcos aim to lower their capex outlays.

Contents

Summary

Second quarter capex hits all-time high of $114B

The big get bigger, with implications well beyond data centers and the cloud

Telcos collaborating with webscale to their benefit, but not without some risk

TikTok, WeChat and webscale tech development

Capex outlook for 2H20

Appendix

List of charts/tables

Figure 1: Annualized capex and R&D spending: WNOs (% revenues)

Figure 2: Big 4 operators' share of global webscale capex (annualized)

 Figure 3: Tencent’s technology investment priorities

Figure 4: Summary of webscale operators’ 2Q20 capex, R&D and cash positions