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Datacenter, IT Hardware Spending Continues Apace Despite Cloud Growth

The cloud market grew faster than any other IT category in 2017, but it wasn't enough to unseat traditional infrastructure hardware.

That's the upshot of data released this week by Synergy Research Group, which tracks IT market trends.

The firm found that datacenter servers accounted for the lion's share of all enterprise IT infrastructure spending in 2017, topping $30 billion globally. However, this segment did shrink by 1 percent compared to the previous year. The leading datacenter server vendor for the year was HPE, according to Synergy.

Trailing marginally was the category of network switches and routers, which was worth around $29 billion -- a 4 percent increase year over year. Unsurprisingly, networking old guard Cisco Systems was the top vendor in the switches/routers market.

[Click on image for larger view.] Source: Synergy Research Group

The hosted and cloud collaboration market came in at third place, despite growing by 13 percent year over year -- the fastest of the six categories that Synergy tracked. Spending in this category was just north of $20 billion in 2017.

"Despite a burgeoning public cloud market, enterprise IT infrastructure spending was still on the rise in 2017 and will be for the next five years," said Jeremy Duke, Synergy founder and chief analyst, in a prepared statement.

"The focus of that spending is changing, however, with a growing emphasis on hosted solutions, subscription-based business models and emerging technologies," Duke added. "Those changes will continue to present challenges for incumbent vendors and opportunities for new market entrants."

Microsoft was the leading hosted/cloud collaboration vendor in 2017, according to Synergy's findings.

Redmond was also second most-dominant vendor (behind leader Cisco) in the category of on-premises collaboration, which clocked about $15 billion for the year. Spending in this market dropped by roughly 6 percent year over year, however.

Synergy estimates that the overall enterprise IT infrastructure market was worth $113 billion in 2017.

About the Author

Gladys Rama is the senior site producer for Redmondmag.com, RCPmag.com and MCPmag.com.

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