Hybrid cloud requirements, increased server functionality and higher component costs are the driving forces for much of the growing market, with enterprises also being forced to lay out the cash to keep up with their competitors.
Over the last 24 months spending on data centre hardware and software has grown by 28%, driven by burgeoning demand for cloud services and increased prices for more fully featured servers, according to research.
New Q2 data from Synergy Research Group shows that the main beneficiaries have been vendors supplying public cloud infrastructure, who have seen a 54% growth in revenues over the period. Growth for enterprise data centre infrastructure has been much lower and spending was actually in slow decline, until a recent spike in server demand and increased pricing gave vendor revenues a boost.
Within the enterprise it is private cloud infrastructure that is driving spending with a 45% increase since the second quarter of 2016. In terms of market share, ODMs in aggregate account for the largest portion of the public cloud market, with Dell EMC being the leading individual vendor, followed by Cisco and HPE.
The Q2 market leader in private cloud was again Dell EMC, followed by Microsoft and HPE. The same three vendors lead in the non-cloud data centre market, though with a different ranking.
Total data centre infrastructure equipment revenues, including both cloud and non-cloud, hardware and software, were $38bn in the second quarter, with public cloud infrastructure accounting for a third of the total. Private cloud or cloud-enabled infrastructure accounted for over a third of the total too. Servers, OS, storage, networking and virtualisation software combined accounted for 96% of the Q2 data centre infrastructure market, with the balance comprising network security and management software.
By segment, Dell EMC is the leader in both server and storage revenues, while Cisco is dominant in the networking segment. Microsoft features heavily in the rankings due to its position in server OS and virtualisation applications. Outside of these three, the other leading vendors in the market are HPE, IBM, VMware, Lenovo, Huawei, Inspur and NetApp.
John Dinsdale, a chief analyst at Synergy Research Group, said cloud service revenues were continuing to grow by 50% per year, enterprise SaaS revenues were growing by over 30%, search/social networking revenues were going up by over 25%, and e-commerce sales were increasing by over 40%. “All this growth is driving big increases in spending on public cloud infrastructure,” said Dinsdale.
“This is not a new phenomenon,” he said. “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,” Dinsdale said.
AddSearch Custom Site Search