We’re smack in the middle of earnings season, so what better time to look at what our favorite providers of consumer cloud services spend on capital expenditures? As we pore and pontificate over revenue and income, it’s good to remember what it actually costs to keep the web up and running.
Here are a few things worth noting as you study the numbers:
- Not all capex spending is on web infrastructure (data centers and servers) — the general category is “acquisition of property and equipment” — but much of it is.
- Apple is making up for lost time — it spent more in its fiscal Q3 than during its entire fiscal 2010, and nearly twice as much as 2009. Its year-over-year increase was 164 percent.
- Facebook’s capex spending as a percentage of its revenue is by far the highest, and its 212 percent year-over-year spending growth tops even Apple. Facebook also spent $52 million leasing equipment.
- Zynga cut spending year-over-year by an impressive 42 percent. This is likely thanks in part to having completed the build-out of its private cloud infrastructure.
- There’s little remarkable about Google’s or Microsoft’s recent spending.
Also, here are a few takeaways and questions:
- I think Facebook will be alright in the long run. I assume its data science and advertising teams understand how people interact with ads on Facebook and are working on the technology to serve ads in a more-effective manner. And it learns more with every piece of data and every new feature. It’s just a matter of implementation.
- Zynga might want to consider more advertising and better analytics. Apparently, in-game purchases aren’t going to cut it financially.
- I wonder if Apple’s capex spending is just an anomaly, or something more like the new norm. If it’s the latter, it looks more and more like a web company in terms of such spending as a core part of its business (GigaOM Pro subscription req’d). That probably depends on how big iCloud scales.
- Will Marissa Mayer ramp up Yahoo capex spending to support new products and compete with Facebook and Google?
- It will be interesting to see how Google Compute Engine and Drive affect its capex spending, and I’m curious how much (and when) Google spent to build the base infrastructure for those products. Spending thus far in 2012 has been markedly less than in 2011.
- I wonder what Twitter spends on infrastructure and how that correlates to its sometimes spotty availability.
Feature image courtesy of Shutterstock user Jakub Pavlinec.