Cisco chasing HPE in cloud infrastructure market

Brexit 'wild card' could slow down further purchasing decisions in the space

Cisco is catching up with Hewlett Packard Enterprise (HPE) in the cloud infrastructure space, according to IDC, which said demand in some areas of the market slowed, adding that Brexit could make things worse.

In Q1, vendor revenue from cloud infrastructure products (server, storage and Ethernet switches) grew 3.9 per cent annually to $6.6bn (£4.9bn), but demand in the hyperscale public cloud sector slowed, negatively affecting the numbers, IDC said.

Over that period, market leader HPE saw revenue in the market jump 19.8 per cent to $1.14bn, giving it a market share of 17.2 per cent, up from 14.9 per cent a year ago. This year, the gap between HPE and second-place Cisco narrowed marginally after the latter saw cloud infrastructure sales boom 30.1 per cent to $786m, taking its market share from 9.5 per cent a year ago to 11.9 per cent in Q1.

IDC said that on top of the slowdown seen in the hyperscale public cloud sector, the UK's decision to leave the EU might also cause the market a headache.

"As the market continues to work through this short-term adjustment period, with geopolitical wild cards such as Brexit looming, end-customers' decisions about where and how to deploy IT resources may be impacted," said Kuba Stolarski, research director for computing platforms at IDC. "If new data sovereignty concerns arise, service providers will experience added pressure to increase local datacentre presence, or face potential loss of certain customers' workloads."

Cloud infrastructure revenue now accounts for almost a third (32.3 per cent) of overall IT revenue in Q1, compared with 30.2 per cent a year ago.