It is something the industry already suspects, but new figures confirm it: the traditional data centre infrastructure market has nosedived over the past two years as private and public cloud roars on.

The numbers (below) come from analysis by Synergy Research, whose latest data shows spending on traditional, non-cloud data centre hardware and software had dropped 18% between the second quarters of 2015 and 2017.

The public cloud market grew 35% during the same period, while the private cloud – or cloud-enabled – grew 16%. The overall market grew by just 5%, to a total now of more than $30 billion.

Leaders in public cloud data centre infrastructure, aside from original design manufacturers (ODMs), are Cisco, Dell EMC and HPE with Cisco on top, while the same three companies lead the private cloud market alongside Microsoft, with Dell EMC out in front.

Each vendor – HPE in servers, Dell EMC for storage, Cisco in networking and Microsoft in server OS – has specific expertise and leadership with different product segments of the market.

“With cloud service revenues continuing to grow by over 40% per year, enterprise SaaS revenue growing by over 30%, and search/social networking revenues growing by over 20%, it is little wonder that this is all pulling through continued strong growth in spending on public cloud infrastructure,” said John Dinsdale, research director and a chief analyst at Synergy.

“While some of this is essentially spend resulting from new services and applications, a lot of the increase also comes at the expense of enterprises investing in their own data centres.

“One outcome is that public cloud build is enabling strong growth in ODMs and white box solutions, so the data centre infrastructure market is becoming ever more competitive,” Dinsdale added.

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