Experts Worry About Revenue Decline in Cloud and Data Center Sector

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Analysts fear that the cloud and data center sector, like all other sectors, could suffer a decline as countries around the world struggle with inflation, high interest rates, and economic slowdown.

Although several companies are adopting cloud technology, major technology companies have experienced slower annual growth rates in cloud revenue. Alphabet’s Google Cloud fell by more than 8 percentage points, Microsoft’s Azure by 6 percentage points, and Amazon’s AWS by more than 3 percentage points quarter-on-quarter.

Intel’s data center and AI group business fell 16% to US$4.6 billion, missing Wall Street estimates by nearly US$2 billion in its latest quarterly earnings. Micron Technology warned of an even worse-than-expected outlook that could affect not only PCs and smartphones, but also the cloud.

According to Sumit Sadana, Micron’s chief business officer, the cloud market is not only facing slower growth, but also a shortage of some chips that prevent the construction of servers.

While important parts of the server supply chain are still missing, Sadana warned that companies are also worried about the economy and are trying to be conservative when buying chips.

The sources for this piece include an article in Reuters.


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