Data centre infrastructure market grows by 28%

12 September 2018 | Natalie Bannerman

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Over the last 24 months, quarterly spend on data centre hardware and software has grown by 28% driven by growing demand for cloud services and increased prices for servers.

According to new Q2 data from Synergy Research Group the biggest beneficiaries of this this boost has been public cloud infrastructure vendors who have seen a 54% growth revenues over this period.

In comparison, growth for enterprise data centre infrastructure has been much lower and spending was in decline until the recent spike in server demand and pricing gave vendor revenues a boost. 

“We are seeing cloud service revenues continuing to grow by 50% per year, enterprise SaaS revenues growing by over 30%, search/social networking revenues growing by over 25%, and e-commerce revenues growing by over 40%, all of which are driving big increases in spending on public cloud infrastructure,” said John Dinsdale, a chief analyst at Synergy Research Group. “That is not a new phenomenon. But what has been different over the last three quarters is that enterprise spending on data centre infrastructure has really jumped, driven primarily by hybrid cloud requirements, increased server functionality and higher component costs.”

In enterprise it is private cloud infrastructure that is driving spend with a 45% increase since Q2 of 2016. As for market share, ODMs combined account for the largest portion of the public cloud market, with Dell EMC being the leading single vendor, followed by Cisco and HPE. Dell EMC was also the Q2 market leader in private cloud, followed by Microsoft and HPE.

Data centre infrastructure equipment revenues, including both cloud and non-cloud, hardware and software, totalled $38 billion in Q2. Public cloud infrastructure accounting for a third of the total, while private cloud or cloud-enabled infrastructure accounted for over a third of the total.

Servers, OS, storage, networking and virtualisation software altogether accounted for 96% of the Q2 data centre infrastructure market, with the remaining balance comprising network security and management software.  Dell EMC is the leader in both server and storage revenues, Cisco leads in the networking segment and Microsoft its holds its tops position in server OS and virtualisation applications. Aside from these three, HPE, IBM, VMware, Lenovo, Huawei, Inspur and NetApp are the other leading vendors in the market.