Dive Brief:

• While corporate appetites for IT have changed, marked by a preference for service-oriented solutions, the enterprise IT infrastructure market still brought in $113 billion over the last year, growing 3% year-over-year, according to a Synergy Research Group report. 
• Cisco is still the dominant enterprise IT infrastructure provider, a technology category that includes data center servers, switches and routers, hosted and cloud collaboration, on-prem collaboration, network security and WLAN. Cisco is considered the market leader across the majority of categories — save for data center servers and hosted and cloud collaboration — and accounts for 26% of the market, according to the report. Hewlett Packard Enterprise (HPE) is considered the No. 2 provider, with 11% of the market share. Microsoft is the hosted and cloud collaboration segment leader. 
• While the emergence of the cloud has changed how companies spend on IT, enterprise IT infrastructure spending will continue to rise through 2022, according to Jeremy Duke, founder and chief analyst of Synergy Research Group, in a statement. "The focus of that spending is changing, however, with a growing emphasis on hosted solutions, subscription-based business models and emerging technologies."

Dive Insight:

While digital technologies and service-based models are trending, companies still have to consume traditional IT infrastructure products to ensure core systems stay running.

But as organizations work to modernize, legacy hardware that provides easily outsourced operations will see shrinking markets. For example, data center server consumers will likely morph from the average enterprise to cloud service providers. Vendors of these products will see shrinking markets and changing buyers as the cloud becomes more prevalent.  

Some vendors are well-poised to survive the changing infrastructure IT market. Cisco, for example, has worked to revamp its portfolio, looking toward a subscription-based model and prioritizing security investments. While a long-time king in networking, the tech giant has changed its portfolio to better reflect how companies consume IT. 

Other companies, however, may not fare so well. HPE has struggled in the changing market, even though it remains one of the leading providers. With a new incoming CEO, the company will have to work to market its streamlined portfolio and continue to deliver strong earnings, which have seen an uptick in recent quarters.