Q4 data from Synergy Research Group shows that Dell EMC, Cisco and HPE are essentially tied for leadership of the strategically important cloud infrastructure equipment market.
For years HPE and Cisco have been in a closely contested fight for worldwide market share, but in Q4 they were joined by the recently merged Dell EMC. All three had a market share of around 11.5%. Coincidentally, ODMs (contract manufacturers) in aggregate had a similar share of the market, thanks to ongoing heavy investment in own-designed hardware by hyperscale cloud providers. Microsoft and IBM round out the group of top cloud infrastructure vendors. Across the different types of cloud deployment, Cisco continues to hold a commanding lead in public cloud infrastructure while Dell EMC gained a narrow lead over HPE in private cloud. Total cloud infrastructure equipment revenues, including public and private cloud, hardware and software, passed the $70 billion milestone in 2016 with Q4 revenue accounting for over 27% of the total. While growth in private cloud has slowed down, spend on public cloud continues to grow at a strong double-digit pace. Servers, OS, storage, networking and virtualization software combined accounted for 95% of the Q4 cloud infrastructure market, with the balance comprising cloud security and cloud management. By segment, HPE has a clear lead in the cloud server segment and is a strong challenger in storage, while Cisco is dominant in the networking segment and also has a growing server product line. Dell EMC is the second-ranked server vendor and has a clear lead on storage. Microsoft features heavily in the ranking due to its position in server OS and virtualization applications, while IBM maintains a strong position across a range of cloud technology markets. "Putting to one side the chunk of the market that is now sidelined and controlled by ODMs, the rest of the market is being heavily contested by the three leading IT hardware vendors," said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group. "While spend on cloud services and infrastructure is already huge it is still relatively early days in the transition of enterprise workloads to the cloud. That means that success in the cloud infrastructure market is vitally important to IT vendors and they will be fighting long and hard to maximize their market shares."