Cloud Infrastructure Leadership Battle Becoming a Two-Horse Race

RENO, NV, December 15, 2014

New Q3 data from Synergy Research Group shows that Cisco has now strengthened its leadership of the cloud infrastructure equipment market and achieved a record high worldwide market share of 15%. HP increased its market share to almost 13% in Q3 and continues to battle Cisco for cloud infrastructure leadership. Meanwhile Microsoft took over the number three ranking from IBM, whose standing has been impacted by the impending sale of its x86 product line to Lenovo – as part of the finalized deal, affected business units started transitioning over to Lenovo after the close of Q3. Total Q3 cloud infrastructure equipment revenues, including both hardware and software, were well over $12 billion, having grown by 10% year on year. Cisco’s overall leadership is due mainly to its dominance of the networking segment and its rapidly growing position in servers. HP is the market leader in cloud servers, a main challenger in storage and also part of the pack chasing Cisco in networking. Microsoft has total dominance of the server OS segment and is one of the leaders in virtualization applications. Servers, OS, storage and networking combined account for 92% of the cloud infrastructure market, with the balance comprising cloud security, cloud management and virtualization applications. Across the different types of cloud deployment, Cisco has a clear lead in public cloud infrastructure while HP leads in private cloud.

“I said earlier this year that cloud infrastructure leadership was becoming a bit of a two-horse race and the Q3 results reinforce that view,” said Jeremy Duke, Synergy Research Group’s founder and Chief Analyst. “IBM will fall further behind Cisco and HP now that it has finally divested its x86 server product line, while Microsoft is almost on its own in the OS segment but cannot match the revenues of the two leaders based on software alone. Further down the ranking Chinese vendors Huawei and Inspur are growing rapidly, while Lenovo will now join them as a major player in cloud infrastructure.”