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HP topples Cisco to become cloud infrastructure equipment market leader

Hardware giant overtakes rival in the cloud infrastructure market as demand for servers, storage and private cloud-enabling kit soars

Hewlett-Packard (HP) has overtaken networking giant Cisco to become the leader of the cloud infrastructure equipment market, as the revenue generated on the back of its services and storage sales soars.

Despite lagging behind Cisco for much of 2013 and 2014, HP finally pulled ahead of its rival during the second quarter of 2015, according to figures released by US-based analyst house Synergy Research Group.

The market watcher said both firms had notched up a good run of sequential revenue growth, but HP’s was stronger overall and underpinned by its ability to maintain its hold on 13% of the total market, while Cisco’s share dropped by half a percentage point.

Both firms were acknowledged by Synergy for performing well in different parts of the market, with Cisco’s kit finding favour with public cloud providers, while HP retains a stronghold on the private cloud space.

“HP’s cloud infrastructure leadership is due to dominating the cloud server segment and being a main challenger in storage, while Cisco’s position is due mainly to its dominating the network segment while rapidly growing its position in servers,” Synergy said in a statement.

Other runners and riders in the cloud infrastructure market include Microsoft, Dell and IBM, although there is some distance between HP and Cisco at the top of the market and the rest of the competitors.

For example, Microsoft is in third place – on the back of the demand for its virtualisation applications and server operating system technology – with just more than 8% market share, followed by Dell (7%) and IBM (6.5%).

Jeremy Duke, Synergy research group’s founder and chief analyst, said the growth of the cloud infrastructure market is being driven by the demand for public cloud services and deployments.

“Cisco continues to ride these waves successfully, but what has enabled HP to grab the lead is the fact servers and storage account for almost two thirds of the market and HP is rapidly evolving its huge business in these segments,” said Duke.

“By contrast, Cisco dominates the relatively smaller networking segment, while its burgeoning cloud server business still lags far behind HP in scale. The good news for all suppliers is that this huge market is growing rapidly and, in aggregate, the two leaders only account for a quarter of it – much the same as they did in 2014,” he added.

Overall, the revenue generated on the back of cloud infrastructure equipment sales now stands at $16bn per quarter and was up 25% on 2014 during Q2, according to Synergy.

Read more about cloud infrastructure spending trends

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