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    HP Eclipses Cisco in Cloud Infrastructure Equipment Market

    Written by

    Chris Preimesberger
    Published September 10, 2015
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      Hewlett-Packard, which is in need of some good news, received a healthy dose Sept. 9 from IT industry analysis firm Synergy Research Group.

      New Q2 2015 research data indicates that HP has wrestled leadership of the rapidly growing cloud infrastructure equipment market away from Cisco Systems, which led the world sector throughout 2013 and 2014.

      The cloud infrastructure equipment market accounts for sales of hardware, software and services for enterprise data centers large and small, as well as data centers for Internet service providers.

      HP and Cisco Systems were essentially tied for No. 1 in Q1 2105, but in Q2 HP opened up a lead by achieving stronger sequential revenue growth. The two leading vendors are each achieving strong revenue growth in the burgeoning market, but HP maintained a 13 percent worldwide market share in Q2 while Cisco’s share dropped to 12.5 percent.

      HP created its Helion cloud infrastructure business in May 2014 as its latest effort in the competitive cloud computing space and backed that up with a $1 billion, two-year investment in cloud research and development. So this latest market research from Synergy is an indication that the investment is paying dividends only 17 months later.

      HP and Cisco are followed in the Synergy market standings by Microsoft, Dell, IBM, EMC, VMware, Lenovo and Oracle.

      Across the different types of cloud deployments, Cisco still holds a commanding lead in public cloud infrastructure, while HP has the lead in private cloud systems. Total cloud infrastructure equipment revenues, including hardware and software, are now running at some $16 billion per quarter, having grown by 25 percent year on year, Synergy said.

      HP’s cloud infrastructure leadership is due to dominating the cloud-optimized server segment and being a main provider of storage. Cisco’s position is due mainly to its dominating the networking segment while also growing its position in servers. Those two differentiators map exactly to the two companies’ main business strengths.

      Microsoft features heavily in the ranking due to its position in server operating system and virtualization applications, while Dell and IBM maintain a strong position across a range of cloud technology markets. Servers, OS, storage and networking combined account for 89 percent of the cloud infrastructure market, with the balance comprising cloud security, cloud management and virtualization applications, Synergy said.

      “The public cloud services market is clearly booming and driving heavy investment in cloud infrastructure, while a rapid transition to cloud is also in full swing in the enterprise IT market,” said Jeremy Duke, Synergy Research Group’s founder and chief analyst. “Cisco continues to ride these waves very successfully, but what has enabled HP to grab the lead is the fact that servers and storage account for almost two-thirds of the market, and HP is now rapidly evolving its huge business in these segments.

      “By contrast Cisco dominates the relatively much smaller networking segment, while its burgeoning cloud server business still lags far behind HP in scale. The good news for all vendors 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 a year ago,” Duke said.

      Reno, Nev.-based researcher Synergy provides quarterly market sizing and segmentation data on cloud infrastructure equipment and related markets, including vendor revenues by segment and by region. Data is provided via Synergy’s flexible SIA database, which enables rapid analysis and provides a range of graphic data presentation options.

      For more information, go here.

      Chris Preimesberger
      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor Emeritus of eWEEK. In his 16 years and more than 5,000 articles at eWEEK, he distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.
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