Rising Above The Rest: Q4 Cloud Infrastructure Market Leaders

Under the Cloud's Hood

The infrastructure that powers the cloud is diverse, integrating a range of technologies -- from servers to networking gear, and operating systems to management and security applications -- all the goodies found in a modern data center.

Synergy Research Group compiled data from the fourth quarter of last year, ranking vendors of these varied public and private cloud technologies by overall market share.

Cisco and Hewlett-Packard, with their respective leads in networking and server hardware, raked in more than one-quarter of worldwide cloud equipment revenue.

But share for both vendors actually dropped slightly from the previous quarter, and neither of them saw sequential growth that kept pace with the market as a whole, which indicates that rule of the data center is still up for grabs.

Cloud Market Is Booming, Hybrids Emerging

Total revenue in the fourth quarter for cloud infrastructure, both hardware and software, was well above $13 billion. That's a 9 percent year-over-year uptick.

More than 90 percent of that revenue came from the sale of servers, operating systems, storage and networking. The final 8 percent was mostly made up of of security, management and virtualization applications.

’Cloud infrastructure is a fast-growing market and now accounts for almost half of all data center infrastructure shipments,’ Jeremy Duke, Synergy's founder and chief analyst, wrote in the report.

’We are seeing strong growth across private, public and hybrid cloud deployments and across all geographic regions. While it remains relatively small, by far the highest growth is being seen in hybrid cloud, and I expect this to continue over the next five years,’ Duke wrote.

7. Lenovo

While Lenovo had developed a small server business on its own, the Chinese hardware vendor jumped up in the rankings overnight when it purchased IBM's x86 server line. It's primarily because of the IBM deal that Lenovo now occupies seventh place in these rankings.

John Dinsdale, Synergy's research director, told CRN that while Lenovo is moving up in the world, it's still a distant No. 7.

With roughly 2.6 percent of the cloud infrastructure market, Lenovo can only claim half the market share of EMC, the next company on this list.

6. EMC

It's thanks to its leadership in storage that EMC holds 5 percent of the server market, and the No. 6 spot on this list.

But EMC has made a number of moves to position itself as a rounded player in the cloud over the last year, with new products, strategic acquisitions and a newly minted cloud business unit.

As a player in converged infrastructure and an emerging force in the hybrid cloud market -- the fastest-growing segment of the overall cloud market -- ignore the EMC Federation at your own peril.

5. IBM

IBM's sharp drop in these rankings over the last quarter was to be expected with the sale of its x86 server line to Lenovo.

But Big Blue's slide started well before selling off its x86 division. As recently as the fourth quarter of 2012, IBM was sitting pretty on top of this market, supplying the world more than 16 percent of the hardware and software used to build cloud infrastructure.

It's been a pretty steady trend in the wrong direction ever since, and now IBM has fallen all the way back to fifth place with less than 8 percent of the market.

Still, IBM remains a force in both servers and storage.

4. Dell

In fourth place in the cloud infrastructure rankings is Dell, which Synergy's Dinsdale described to CRN as "a bit like HP, only smaller."

Dell is the second largest cloud server manufacturer behind HP, and also offers a number of storage products that generate substantial revenue for the privately held company.

Dell's market share has remained remarkably consistent over the last two years -- always hanging somewhere between 7 percent and 8 percent. That's good enough to be ahead of IBM as of the last quarter.

3. Microsoft

Microsoft seems to be slowly but surely ascending.

The world's largest software company owned less than 8 percent of the cloud infrastructure market at the end of 2012, but has now clawed its way up to almost 10 percent. IBM's slide also bumps Microsoft up a notch in the rankings to No. 3.

Microsoft enjoys nearly total dominance of the server OS segment, with Windows Server still a mainstay. It's also the second largest vendor of virtualization applications, with the Hyper-V virtualization platform only trailing VMware in terms of adoption.

Hyper-V gives Microsoft an entry point into private cloud data centers and a selling point for connecting businesses to Microsoft's own Azure public cloud, as well as a range of cloud-based services and applications.

2. HP

HP, with 12 percent of the cloud infrastructure market, just trails Cisco in the jostling to be king of the hill.

But the largest vendor of cloud servers in the world is the dominant vendor within the private cloud data center, according to Synergy.

HP is also challenging storage leader EMC, exhibiting strong growth in that arena and having in recent days hired a former NetApp Exec to head its storage division.

If that weren't enough, HP is a member of the pack chasing Cisco's networking market. The recent deal to purchase of Aruba Networks for $3 billion certainly turned up the heat.

1. Cisco

Dominating networking is a good place to be. Cisco's gear can be found just about everywhere you look in a data center, and its lead is most pronounced in public cloud facilities.

If that weren't enough to put Cisco on top of the heap, its rapidly growing position in the server market did the trick.

With Cisco's Intercloud strategy, and the Intercloud Fabric software component stringing together a growing alliance of converged clouds, it'll be interesting to see how Cisco fares as the market evolves.