Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
Cloud providers turned their attention to their networks last year, increasing spending on gear that enables data center operators to deliver faster, more reliable services.
In total, the cloud IT infrastructure market — defined as server, storage and Ethernet switches by IDC — generated $32.6 billion in sales last year, an annual increase of 9.2 percent, said the research firm. For the fourth quarter (Q4) of 2016, revenue was $9.2 billion, a year-over-year improvement of 7.3 percent.
Cloud Storage and Backup Benefits
Protecting your company’s data is critical. Cloud storage with automated backup is scalable, flexible and provides peace of mind. Cobalt Iron’s enterprise-grade backup and recovery solution is known for its hands-free automation and reliability, at a lower cost. Cloud backup that just works.
IDC research director Kuba Stolarski noted that the market took a bit of a breather in 2016 as cloud computing giants delayed new hardware purchases. “Growth slowed to single digits in 2016 in the cloud IT infrastructure market as hyperscale cloud datacenter growth continued its pause,” he said in a statement.
By comparison, cloud infrastructure sales reached $29 billion in 2015, a gain of nearly 22 percent compared to the previous year.
Despite the slowdown, providers remained focused on improving their networks to provide faster, more reliable cloud services and applications. “Network upgrades continue to be the focus of public cloud deployments, as network bandwidth has become by far the largest bottleneck in cloud datacenters,” Stolarski said.
In Q4 2016, sales of Ethernet switches to public and private cloud providers jumped 30 percent and nearly 53 percent on an annual basis, respectively. Server sales to public cloud companies rose a modest 2.4 percent while storage revenue suffered a 2.1 decline during the quarter.
This year, Stolarski expects that cloud providers will rediscover their appetite for servers. “After some delays for a few hyperscalers, datacenter buildouts and refresh are expected to accelerate throughout 2017, built on newer generation hardware, primarily using Intel’s Skylake architecture,” he said.
Dell Technologies, now home to EMC’s storage portfolio, was 2016’s leading cloud infrastructure provider, raking in $5.7 billion in revenue and claiming 17.6 percent of the market. HPE and its Chinese joint venture, the New H3C Group, followed close behind with sales of $5.3 billion and 16.3 percent of the market. Cisco took third place and fourth place was shared among Huawei, Lenovo, IBM and NetApp.
Dell Technologies was also the number one cloud infrastructure vendor of Q4 2016, with sales of nearly $1.6 billion and a 17-percent share of the market. HPE/New H3C Group, took second place with $1.3 billion in revenue and 14.6 percent of the market. Cisco and Huawei were third and fourth, respectively. IBM, Lenovo and NetApp shared a three-way statistical tie for fifth place.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.
