Each quarter for the last four years, HPE and Cisco have vied for the lead in cloud infrastructure market share, with revenues on par, according to Synergy Research Group. While Synergy’s Q3 data showed that trend continuing, it also showed original device manufacturers (ODMs) and the newly-merged Dell EMC crowding the picture by keeping pace.
HPE earned slightly more cloud infrastructure revenue than Cisco in the quarter, with each company accounting for about 12 percent of the market. Dell EMC earned about 11 percent of the market’s revenue, roughly equivalent to the individual shares of Dell (7 percent) and EMC (4 percent) prior to the recently completed merger. ODMs, however, collectively had an even higher market share than Dell EMC, due to heavy investment by hyperscale providers in “own-designed” servers, storage, and routers.
The market share of each of the four market participants above grew in Q3, while that of Microsoft (7 percent) and IBM (4 percent) declined.
Revenues for cloud infrastructure equipment, including public and private, hardware and software, are on pace to total $70 billion in 2016.
“Growth in private cloud infrastructure is slowing down as enterprises shift more attention and workloads to the public cloud, but that means that there is a continued boom in shipments of infrastructure gear to public cloud providers,” John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group said in a statement. “For traditional IT infrastructure vendors there is one fly in the ointment though – hyperscale cloud providers account for an ever-increasing share of data center gear and many of them are on a continued drive to deploy own-designed servers, storage and networking equipment, manufactured for them by ODMs.”
By segment, HPE is the clear leader in cloud servers, and the main challenger in storage. Cisco dominates the networking segment, and had strong server growth. Dell EMC now has a clear lead in storage, and had the second-highest server revenue. Microsoft’s position is largely due to its server OS and virtualization applications, and research released by Synergy in June showed its share of the cloud infrastructure software market is over 40 percent.
HPE recently turned over its interests in OpenStack and Cloud Foundry to SUSE, a subsidiary of Micro Focus. HPE had previously announced it would spin off some non-core software to Micro Focus, and its shareholders would take a controlling interest in the company, thereby – sort of – divesting itself of its open source cloud portfolio.