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Public cloud fuelled bulk of datacentre infrastructure spend in 2018, research shows

Latest datacentre infrastructure tracker from Synergy Research Group highlights the impact the growing demand for public cloud is having on the market

The worldwide datacentre hardware and software market continued to go from strength to strength in 2018, fuelled by user demand for public cloud environments and higher-specification servers.

Global spending in this market segment grew by 17% in 2018 to $150bn, according to Synergy Research Group’s annual datacentre hardware and software market tracker.

The bulk of this growth can be attributed to the sales of public cloud-enabling datacentre hardware and software, with Synergy’s data showing a 30% year-on-year surge in spending in this area.

Meanwhile, spending on datacentre hardware and software intended for use within private enterprise facilities grew more modestly at 13% in 2018, thanks to demand for private cloud deployments, which Synergy said helped offset a marginal decline in traditional, non-cloud infrastructures in this sector.  

“The former [category] was driven primarily by strong volume growth in public cloud and other service provider offerings; the latter was driven primarily by higher average selling prices [ASPs] thanks to more fully featured products,” said Synergy in a statement.

Original design manufacturers (ODMs) had another standout year, achieving some of the highest growth figures seen in the datacentre hardware and software market in 2018.

Where public cloud datacentres are concerned, the ODMs lead the market – from a supplier point of view – as many of the firms that operate in this segment choose custom-made products to suit the specific needs of their environment over commodity hardware and software, for example.

But within private cloud datacentre environments, the picture is a little different, with Dell-EMC ruling the roost, along with Microsoft, HPE and Cisco.

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Where more traditional, non-cloud datacentre environments are concerned, Microsoft leads the market – thanks to the enduring popularity of its server operating system and virtualisation software, with Dell-EMC, HPE and Cisco completing the top four.

John Dinsdale, chief analyst at Synergy Research Group, said the surge in spending on public cloud infrastructure makes sense in the context of how the rest of the cloud market is performing.

“Cloud service revenues continue to grow by almost 50% per year, enterprise SaaS [software as a service] revenues are growing by 30%, search/social networking revenues are growing by almost 25%, and e-commerce revenues are growing by over 30%, all of which are helping to drive big increases in spending on public cloud infrastructure,” he said.

“We are also now seeing some reasonably strong growth in enterprise datacentre infrastructure spending, with the main catalysts being more complex workloads, hybrid cloud requirements, increased server functionality and higher component costs. We are not seeing much unit volume growth in enterprise, but vendors are benefiting from substantially higher ASPs.”

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