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Public cloud giants fuel double-digit growth in datacentre hardware and software spend

Research reveals how the datacentre buildout plans of the public cloud giants are affecting hardware and software spend

The soaring demand for public cloud services has led to another double-digit surge in datacentre hardware and software spend, reveals figures compiled by Synergy Research Group.

The market watcher’s data shows that the amount of money spent on datacentre hardware and software grew by 10% between 2020 and 2021, fuelled by the IT spending habits of the public cloud giants.

A total of $185bn was spent on datacentre infrastructure equipment in 2021, with 47% of that spend being used to kit out public cloud datacentres.

“Cloud provider spending on datacentre hardware and software jumped 20% in 2021, having jumped by 22% the previous year,” said John Dinsdale, chief analyst at Synergy Research Group.

“Cloud providers have increasingly driven the market for datacentre gear and Synergy’s five-year forecast shows there will be no let-up in this trend.”

Where enterprise spending on datacentre hardware and software is concerned, Synergy logged a 3% year-on-year (YoY) rise in spending, which constitutes something of a bounce-back given its 2020 figures recorded a 6% decline in the amount enterprises were spending on server farm equipment.

The majority of the hardware being acquired to kit out public cloud datacentres is being sourced from original design manufacturers (ODMs), with Inspur, Dell and Microsoft’s kit also proving popular with this group of buyers, confirmed Synergy.

Where the enterprise market is concerned, it is Microsoft, Dell, HPE, Cisco, VMware and IBM leading the charge.

“The total datacentre equipment market continues to expand with overall 2021 growth rate picking up after two relatively subdued years. The biggest story is the ever-increasing share of the market that is accounted for by sales to public cloud providers, who now account for almost half of all spending on datacentre gear,” said Dinsdale.

“We forecast that these trends will continue over the next five years, with double-digit annual growth in sales to cloud providers helping to offset a somewhat flat enterprise market.

“In the server segment of the market, unit shipments to public cloud providers have now far surpassed enterprise volumes, though the difference in value of the two market verticals is much less pronounced due to higher enterprise server average selling prices. That gap in value will grow as public cloud server volumes continue to surge.”

 The Synergy data comes hot on the heels of another piece of research from the IT analyst house that suggests there are more than 300 further hyperscale datacentres on course to go live by the end of 2026

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