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HP, Cisco Dominate Cloud Computing Data Center Hardware

December 23, 2015

Even though the growth of cloud computing is supposed be a revolution in the way IT is handled, it’s dominated by some familiar names, according to Synergy Research.

The two biggest players are Hewlett Packard and Cisco in a new report that values the cloud market at $120 billion.

“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," Jeremy Duke, Synergy founder and chief analyst, said. "While the market dynamics are different for private cloud, it, too, will drive enormous changes in the investment patterns for enterprise data center hardware, software and services."

Hewlett Packard Enterprise represented nearly 25 percent of the enterprise hardware installed around the world. Cisco was still the leader in service provider hardware thanks to its longstanding presence in networking, especially routers.

Microsoft, despite its troubles at getting into mobile, still accounted for 70 percent of the enterprise software market share. The company has enthusiastically embraced the cloud with Azure. Windows and Hyper-V has the biggest share, followed by VMware.

The likely reason is that cloud providers need reliable hardware in order to deliver their services, and bigger companies are the only ones capable of delivering at scale.

Many cloud data centers use lots of rack-mount servers, which make up 34 percent of the market.

Data centers need to deploy new nodes quickly and replace them when they fail, which means they need a reliable supply of ready-made servers, which the major hardware vendors are happy to supply.

The back end will likely look more viable as consumers cool off on new devices, especially PCs. Enterprise companies will have complex needs and the ability to pay for them, which is why Dell, HP, Microsoft and others still see them as their primary market.

Edited by Maurice Nagle

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