Spending on enterprise infrastructure falls during first quarter

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The impact of the COVID-19 pandemic caused spending on enterprise infrastructure to fall during Q1, research has revealed, while spending on public cloud increased during the same period.

According to new data from Synergy Research Group, worldwide spend on data centre hardware and software declined by 2% when compared with the first quarter of 2019, bringing an end to a steady growth trend.

By contrast, public cloud data centre infrastructure came through the period unscathed, with hardware and software vendors seeing revenues increase by 3%. Sales to enterprises and traditional service providers were found to have dropped by 4%, however.

In terms of market share, the research firm said ODMs accounted for the largest portion of the public cloud market, with Dell ISG the leading vendor, edging out rivals Microsoft, Inspur and Cisco.

In the enterprise infrastructure arena, Microsoft continued to lead during Q1, followed by Dell, HPE, Cisco and VMWare.

In total, Synergy found that data centre infrastructure equipment revenues – including both cloud and non-cloud, hardware and software – came to $35.8 billion during Q1, with public infrastructure making up 37% of that figure.

The main hardware-orientated segments of servers, storage and networking accounted for 73% of the data centre infrastructure markets. OS, virtualisation software, cloud management and network security accounted for the balance, Synergy said.

By segment, Dell leads in terms of both server and storage revenues, while Cisco dominates the networking segment, the data revealed.

Microsoft features heavily in the rankings due to its position in server OS and virtualisation applications. Of all the leading vendors, Inspur was found to have seen the highest growth rate during the period.

"Cloud service revenues continue to grow by almost 40% per year, enterprise SaaS revenues are growing by almost 25%, search/social networking revenues are growing by over 15%, and e-commerce revenues are growing by over 20%, all of which are helping to drive growth and increased spending on public cloud infrastructure," commented John Dinsdale, chief analyst at Synergy Research Group.

"Notably, most of these services are either little impacted by COVID-19 or may be stimulated by changed enterprise and consumer behaviour.

"On the other hand, many enterprises have been negatively impacted by the pandemic resulting in increased pressure on capital budgets and more impetus on shifting workloads to public cloud providers."


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