Decelerating Spend but Expanding Multiples? | Sami Badri Navigates Tricky Data from Digital Infrastructure Sector

DULLES, VA -- Some research analysts characterize the last five years of data center industry development as largely focused on growth and technological cloud deployment. This will likely remain the focus globally, with Europe and Asia growing faster than North America. However, as the North American market matures, business optimization is a key strategic focus for management teams. Frequent CAPRE contributor Sami Badri, Senior Equity Analyst at Credit Suisse sought to blow these trends wide open with his keynote “Five Data Center Industry Trends to Drive Investment Returns for the Next Five Years” at CAPRE’s recent 2020 Digital Infrastructure Outlook in Dulles, VA. Badri kicked off the session by asking the gathering for their opinion on the growth of the industry, asking them to raise their hands based on whether they think data center industry growth is moderate or significant. As it turned out, the crowd was more on-board with the latter choice. Badri then took it one step further, asking if they expect to see the record-high absorption levels seen in 2018 repeated in the next two years. However before discussing the results of this straw poll, Badri first dove into what Facebook, Microsoft, Google, Oracle, IBM, and the other major hyperscalers are spending on data center infrastructure. “In 2018, the actual dollars toward data center infrastructure, office space equipment increased 53% year over year. That was an unprecedented surge and a very positive surprise,” he recalled. “But this…