Cisco lords it over IBM and HP in cloud equipment space

IBM and HP suffer poor quarter as the likes of Google and Rackspace increasingly turn to ODMs to help them build server platforms

A crash in server sales has enabled Cisco to surge past HP and IBM to snatch the lead in the global cloud infrastructure equipment market, figures from Synergy Research indicate.

According to the market watcher, the cloud infrastructure equipment market reached $9.7bn (£6.2bn) in the first quarter of 2013, down 12 per cent sequentially but marginally up on an annual comparison.

The market's two dominant players - IBM and HP - were hit badly in Q1 (see graph, bottom) as their cloud infrastructure equipment sales were dented by the flatlining server market and an increasing trend among public cloud providers to build their own server platforms.

Cisco, in contrast, enjoyed a blistering quarter in public cloud networking, allowing it to capture a 15 per cent share of the overall market, Synergy said.

HP and IBM both held between 14 and 15 per cent of the market, with Dell a distant fourth with a share of about nine per cent. EMC placed fifth with a six per cent share of the spoils.

Two years ago, Cisco - which was talking a good cloud game at its recent Worldwide Partner Summit - held less than 12 per cent of the market and Synergy founder Jeremy Duke said the networking kingpin had been "steadily and consistently" building its share in the market.

"While the server market is somewhat volatile and subject to substantial quarterly swings, we are also seeing the effects of two disruptive trends taking hold which are affecting the big server vendors in particular," he said.

"Firstly, companies with massive datacentres such as Google and Rackspace are increasingly building their own server platforms assisted by ODMs. Secondly, due to the market adoption of infrastructure-as-a-service (IaaS), organisations both big and small are increasingly outsourcing their datacentres."

Duke said the later trend will continue to fuel M&A activity, along the lines of IBM's recent acquisition of SoftLayer.