Search
Homepage This page's url is: -crn- Rankings and Research Companies Channelcast Marketing Matters CRNtv Events WOTC Jobs HPE Zone Masergy Zenith Partner Program Newsroom Intel Partner Connect Digital Newsroom Dell Technologies World Newsroom Dell Technologies Newsroom IBM Newsroom The IoT Integrator NetApp Data Fabric Intel Tech Provider Zone

Public Cloud Propels Slight Increase In 2019 Data Center Spending

After an unusually lucrative 2018, growth drastically slowed in sales of hardware and software powering data centers, but still climbed above $152 billion, according to Synergy Research.

Global spending on data center hardware and software increased again in 2019 thanks to investments made by public cloud providers.

Enterprises, managed services providers and public clouds shelled out a total of $152 billion last year on building out their data centers. That represented a 2 percent uptick from the previous year—a far cry from 2018, which saw an 18 percent surge in spending in what was an unusually lucrative year for that market.

“The market could not match the bumper growth year that it had in 2018, but it still managed to nudge upwards by 2 percent,” said John Dinsdale, Synergy’s chief analyst.

But 2018 was an outlier for several reasons, Dinsdale said. Not only did unit volumes increase, but the market was powered by richer server configurations and higher component costs.

[Related: Large-Scale Data Center Spending Pauses In Q1 2019]

The year that recently ended continued the trend of public clouds becoming more-important drivers of revenue to technology suppliers, especially ODM vendors—public cloud spending ramped by 7 percent in 2019, while investments in traditional data centers declined by one percent.

Those public cloud providers now fuel 37 percent of the larger market, compared to 25 percent back in 2015, according to Synergy.

Servers were the largest product segment in that mix, accounting for 46 percent of the 2019 spend. Other technologies that pushed the market above $150 billion included operating systems, storage, networking, virtualization software, network security and management software.

As to vendors, based on Q4 revenue, Dell, Microsoft, HPE and Cisco led the field, followed by Huawei, IBM, VMware, Inspur and Lenovo.

Public cloud providers were able to continue ramping spend on those companies’ products because they were seeing whopping 39 percent growth in the cloud services they offered their own customers.

“Meanwhile, enterprise spending on their own data centers is being crimped by the shift in workloads to public clouds,” Dinsdale said. “We are already seeing server shipments to public cloud providers outstripping shipments to enterprises and that trend will continue.”

Back to Top

related stories

Video

 

sponsored resources