Cloud, data services to push data centre boom

HONG KONG, CHINA: A nascent global build-out of data centres will benefit a range of specialty chip and telecommunications equipment makers, fuelled by burgeoning demand for data storage and remotely managed computer services, a Broadcom Corp executive said on Wednesday.

The broader data centre business, which relies on a wide range of equipment suppliers, from specialty chipmakers to makers of routers, switches and data storage devices, was expected to grow on average by 20-30 percent over the next three years, said Nick Ilyadis, Broadcom's chief technology officer for infrastructure, citing industry data.

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The growth is coming as everyone from telecoms operators such as Verizon Communications Inc to Internet giants such as Google Inc and even outsourcing firms like India's Wipro Ltd tries to get in on an industry expected to explode in the next decade with the rise of demand for data services.

Cloud computing, the concept of allow computer users to access software from large, powerful off-site computers rather than on their own PCs, was also expected to fuel the explosion, Ilyadis said in an interview on the sidelines of a cloud computing event in Hong Kong.

"The data centre business is expected to see compound annual growth of 20-30 percent industry-wide," he said. "We're at or above that ... data centres is one of our growth drivers."

He estimated that Broadcom and California-based rival Marvell Technology Group Ltd currently control more than half the market for "merchant silicon" -- specialty chips sold on the open market for use in routers that help to power data centres.

Makers of routers such as Cisco Systems Inc, Hewlett-Packard Co and China's Huawei Technologies are also expected to see strong demand on the build-out.

Among Internet firms, big names like Google, Facebook and Microsoft Corp are some of the biggest builders of data centres, while many telecoms operators are also rapidly building up their capabilities to accommodate the explosion in data traffic.

Ilyadis said developing markets could be particularly well suited to capitalise on the trend as they look to cloud computing to leapfrog the developed market model where most consumers still install and use software on their own computers.

"I look at China as the right environment for this kind of model," he said. "India is another one that's coming down that path."

Ilyadis declined to say how much chips from his infrastructure division provided to Broadcom's overall revenue, except to say the amount was "significant".

Last month Broadcom reported that third-quarter revenue rose 44 percent to $1.81 billion year on year, and said it expected to post fourth-quarter revenue of $1.8 billion to $1.9 billion.