Total third-quarter spend on data center infrastructure grew by 3% year on year to reach $29 billion, with most of the growth coming from service provider hardware which grew by over 20%, according to market research firm, Synergy Research. Data center infrastructure segment includes servers, server OS, storage, networking, network security and virtualization software.
Jeremy Duke, Synergy Research Group's founder and Chief Analyst, said that "Data centers are the foundation of cloud services and this has driven annual spending on data center networking, compute and storage toward the $120 billion mark. The mass adoption of public cloud services has created the need for widespread deployment of hyperscale data centers and has led to record spending on service provider data center equipment."
In term of vendors, Synergy expects HPE, Cisco and Microsoft to continue to lead in the three main data center infrastructure market segments -- enterprise data center hardware, service provider data center hardware and data center software respectively. Enterprise hardware accounts for over half of the market and in the third quarter, HPE extended its lead and grew its market share to 24%.
Service provider data center hardware is a much smaller market than enterprise, but it is growing very strongly in contrast to the relatively flat enterprise market. Cisco continues to lead in service provider hardware thanks to its dominance of data center networking and its rapidly growing server business. Data center software is the smallest of the three segments and it is totally dominated by Microsoft, with VMware being the only other vendor with substantive market share, said Synergy Research.
