skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Ovum view


With 85% of the market reporting, Internet content provider (ICP) capex is on track to reach well over $60bn in 2015. ICPs continue to spend big on infrastructure, starting with data centers. Telco capex remains four to five times that of ICPs, but the OTT and cloud providers are growing fast and influencing technology debates around virtualization and software-centric networks.

Data center boom isn’t over

The largest web-scale/Web 2.0/OTT companies – which we classify as ICPs – are Google, Apple, Microsoft, Amazon, and Facebook. They account for nearly 60% of this market segment’s network capex. These five, and most other ICPs, are engaged in ongoing expansion of their global data center networks.

The growth comes from a range of methods, including new builds, retrofits of existing data centers (newly acquired or already owned), and co-location in other providers’ facilities. These five big providers claim a total of 183 data centers, according to Ovum’s latest (3Q15) Global Data Center Analyzer. All five have large facilities around the world, but Apple stands out due to its three massive (each over 1 million square feet) data centers in Ireland, Denmark, and Arizona. The first two are still under construction, and Apple has budgeted a combined $1.9bn to get them up and running by 2017.

ICPs will continue to invest heavily in data centers and DC interconnect, but the focus of their investments will spread over time, as the telco-OTT competitive landscape evolves. Google continues to build fiber access networks, for instance, and is stepping into mobile. Microsoft is investing heavily in enterprise communications and collaboration following its early acquisition of Skype.

Entirely new service/app categories are also emerging, such as self-broadcasting (Twitter/Periscope, Meerkat, and now Facebook). These services not only chew up bandwidth but can force changes to product and network designs – just as Netflix’s growth enticed the company to custom-design its own server and content delivery network (CDN) technology. Even LinkedIn, a relatively small ICP with 2015 capex of $507m, is now designing its own server. Just as Google said many years ago when it started self-design, LinkedIn says off-the-shelf products don’t address its needs.

Forecast outlook

Ovum’s latest ICP forecast called for 6–7% revenue growth and 11% capex growth in 2015. Preliminary results suggest both revenue and capex growth of around 6% in 2015. The capex shortfall is due largely to Google’s moderation of capital outlays last year – it spent about $1bn less in 2015 than the year before – as it absorbed infrastructure built in 2014 and was distracted by a corporate reorg. Google expects a capex uptick in 2016, as do Facebook, Apple, and several other significant ICPs.

While our 2015 capex forecast for ICPs may end up being slightly ($1–3bn) too high, we stand by the projections laid out for 2016–20. ICP revenues will grow an average of 6% per year through 2020 (2014–20 CAGR), while capex will grow at a faster 11% CAGR. That will push the segment’s capex up to about $110bn by 2020, growing to nearly a third of the telco (communications service provider, or CSP) market’s likely spending that year.


Further reading

“US telco capex flattens to just below $70bn in 2015,” TE0006-001181 (January 2016)

Telco–OTT Partnerships Tracker: 2H15, TE0004-001056 (January 2016)

OTT Communications Tracker: 3Q15, TE0003-000889 (December 2015)

Communications Provider Revenue & Capex Forecast: 2015–20, TE0006-001167 (December 2015)

Communications Service Provider (CSP) Revenue & Capex Tracker: 3Q15, TE0006-001172 (December 2015)

Global Data Center Analyzer: 3Q15, TE0017-000055 (September 2015)

“Facebook, Microsoft, and Google tackle connectivity, play harder on telcos’ turf,” TE0009-001465 (September 2015)

“Google’s rebranding as Alphabet spells a tighter focus for core businesses,” TE0003-000869 (August 2015)

Netflix: Network and Technology Profile, TE0006-001056 (April 2015)


Matt Walker, Principal Analyst, Intelligent Networks

Recommended Articles


Have any questions? Speak to a Specialist

Europe, Middle East & Africa team - +44 (0) 207 017 7700

Asia-Pacific team - +61 (0)3 960 16700

US team - +1 646 957 8878

Email us at

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 788 597 5160 or email us at

Contact marketing -

Already an Ovum client? Login to the Knowledge Center now