Dive Brief:
- Vendor revenue from sales of infrastructure products for cloud IT — defined as servers, enterprise storage and Ethernet switches used to help companies deploy in cloud environments — grew by 9.2% year over year to $32.6 billion in 2016, according to data from IDC. The data incudes public and private cloud. IDC had previously predicted the cloud IT infrastructure market would reach $37.2 billion in 2016.
- "Growth slowed to single digits in 2016 in the cloud IT infrastructure market as hyperscale cloud datacenter growth continued its pause," said Kuba Stolarski, research director for Computing Platforms at IDC.
- Dell EMC overtook Hewlett Packard Enterprise (HPE) as the leading cloud IT infrastructure vendor in 2016, claiming 17.3% of the market over HPE's 14.6%.
Dive Insight:
In 2015, this same market was led by Hewlett Packard Enterprise, which accounted for 15.7% of the market share, followed by Dell (10.6%), Cisco (9.6%) and EMC (7.6%). But the fact that Dell and EMC are now operating under a single, defined strategy was enough to finally push Dell ahead of HPE.
Though Dell leads the market, we may not have seen the end of the jockeying among top players. Dell and HPE had slightly lower revenue and market share in 2016. Meanwhile, Cisco and Huawei saw significant growth. Cisco revenue was up 23% in Q4 2016 over Q4 2015, while Huawei was up 61% over the same period.
The cloud infrastructure numbers are still strong, but they are down just a bit. In addition to a slowdown in hyperscale cloud datacenter growth, the slowdown could also be attributed to the fact that many of the companies that could easily migrate to the cloud have now done so, while companies that face more complicated and time consuming migrations are now up to bat.
Still, cloud infrastructure is growing much faster than traditional (non-cloud) IT infrastructure, which dropped another 9% in the fourth quarter of 2016 from the fourth quarter of 2015.
