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Global spending on enterprise datacentres continues to dampen in face of Covid-19

Synergy Research Group hails continued, growing demand for datacentre hardware and software from hyperscalers for keeping market buoyant during pandemic

The Covid-19 coronavirus pandemic is continuing to dampen enterprise demand for datacentre hardware and software, with second-quarter spending in this area down 3% on 2019 levels.

That’s according to Synergy Research Group’s latest quarterly datacentre hardware and software market tracker, which goes on to confirm that kit destined for deployment in public cloud datacentres is keeping the sector relatively buoyant at the moment.

Global spending on datacentre hardware and software by both hyperscalers and enterprises was up by 7% year-on-year overall during the second quarter of 2020, thanks to a 25% jump in spending on public cloud-enabling datacentre kit.

The total amount spent on datacentre infrastructure for use in cloud and non-cloud environments hit $41.4bn during the second quarter, Synergy’s data confirms, with public cloud infrastructure spending account for around 41% of this.  

Furthermore, investments in servers, storage and networking kit accounted for 75% of this spend during the quarter, while operating system, virtualisation, cloud management and networking security software made up the remainder.

“Cloud provider spending on datacentre hardware and software hit an all-time high, while enterprise spending on similar products was down from 2019,” said Synergy Research Group chief analyst, John Dinsdale, in a statement.

“While cloud service providers continue to go from strength to strength, elements of the enterprise market are being dogged by Covid-19 and related issues.”

That said, a separate report by Synergy earlier this year flagged that one of the defining spending trends of 2019 was a marked downturn in demand from enterprises for datacentre hardware and software, which was being counteracted by the growing rise in hyperscale spend in this area.

From a supplier perspective, Dell leads the market in terms of the amount spent on server and storage devices, the second quarter data shows, Cisco remains the provider to beat within the networking sector, and Microsoft is also called out for dominating the amount organisations spend on server operating systems and virtualisation software.

“In the middle of a global pandemic, spending on datacentre infrastructure was almost at an all-time high – second only to the fourth quarter of 2019. That speaks volumes about the continued robust growth in both enterprise and consumer cloud services,” said Dinsdale.

“There was also a geographic story behind the growth. The US market grew at a good pace in the quarter, but among the larger markets it was China that was the standout performer, jumping almost 35% from the second quarter of last year.”

Read more about Covid-19-related datacentre adoption trends

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