Dell, HPE, Cisco Top Cloud Infrastructure Market – Analysts

Scott Ferguson

The newly minted Dell EMC is making its presence felt in the global cloud infrastructure market. The company now ranks as one of the three top hardware suppliers along with stalwarts Hewlett Packard Enterprise and Cisco, according to a new report.

By the end of the fourth quarter of 2016, Dell, HPE and Cisco all had a 11.5% share of the worldwide cloud infrastructure market, according to Synergy Research Group, which released its report Monday.

For a number of years, HPE and Cisco fought for the top spot in the cloud infrastructure market, but the newly formed Dell EMC company has wedged its way into a top spot thanks to its storage offerings. (See Cisco Gains, Dell & HPE Lose on Cloud Infrastructure - Analyst.)

In addition to these companies, the report found that smaller ODM contract manufacturers, when taken in aggregate, control about 11% of this market as well, showing that many enterprises are willing to gamble on smaller suppliers if the price is right.

Overall, the cloud infrastructure market totaled $70 billion in 2016, with the fourth quarter accounting for about 27% of that overall number. The majority of that money was spent on public cloud platforms, which saw double-digit growth through the year. At the same time, spending on private cloud slowed. (See Private Cloud Is Very Popular Yet Nobody's Doing It.)

"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," John Dinsdale, chief analyst and research director at Synergy, wrote in a statement.

Over the latest 12 months, businesses of all sizes spent most of their money on physical servers, operating systems, storage, networking and virtualization software.

Businesses also spent more in 2016 on cloud security and cloud management.

While Dell has had success supplying storage, HPE dominated the server part of the market, while Cisco supplied the most networking equipment. While Cisco dominated in the public cloud market, Dell and HPE went head-to-head in the private cloud market.

Microsoft, which supplies OS and virtualization software, and IBM, which also suppliers different cloud technologies, also ranked in the report.

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— Scott Ferguson, Editor, Enterprise Cloud News. Follow him on Twitter @sferguson_LR.

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3/24/2017 | 11:02:30 AM
Re: Switching Suppliers
Yes, the growth rate of Dell does bear watching after that quick spike up on the charts meeting up with the two other major competitors. Being named "as one of the three top hardware suppliers," isn't a bad thing of course but it's not going to allow Dell to stop pushing for more clients and storage business.
3/22/2017 | 9:46:10 AM
Re: Switching Suppliers
@danielcawrey: My one question would be can Dell keep this growth up? The managed to get into the market by buying EMC and thus used that companies market share to edge their way into the top tier. Now, can they keep that growth going and keep supplying the cloud market? Let's check back a year from now. 
3/21/2017 | 2:25:48 PM
Re: Switching Suppliers
This is exactly why Dell went private - they have been able to go after these publicly held companies. Dell has been agressive in the market, and it's been paying off. You have to give them credit where it is due - they've been executing quite welll. 
3/20/2017 | 11:52:58 PM
Switching Suppliers
How easily could a business switch from one supplier to another in this market, I wonder. Pretty easily, I'm guessing. I wonder how that affects pricing and margins.
3/20/2017 | 4:00:02 PM
Re: Lots more
@danielcawrey: And I think this report shows that. In terms of email and other SaaS application, you have a market that is not mature but on the road to maturity. With IaaS and public cloud, we're a far way from being at that level. Most IT is still spent on traditional data center equipment and software -- only a small percentage goes to cloud. I think that will change, but it will still be a while.

3/20/2017 | 3:52:39 PM
Lots more
There is certainly a lot of room for the cloud market to grow. I think there are some services like email and basic databases that have already moved, but there's still a lot more to go. Complex services and data structures are going to the cloud, it's just going to take longer because of complexity. 
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