Dell And HPE Battle For Cloud IT Infrastructure Sales Leadership As OEM Market Explodes In 2018

Cloud Infrastructure Sales Hit $12.9B

Organizations spent a whopping $12.9 billion on servers, storage and network infrastructure products in the first quarter of 2018, representing a 45 percent increase in spending year over year, according to new worldwide data from market research firm IDC.

Dell, Hewlett Packard Enterprise and Cisco continue to fight for cloud IT infrastructure revenue share as all regions across the globe grew sales by double digits year over year, including a 44 percent increase in the U.S.

"Digital transformation initiatives such as edge computing and machine learning have been bringing new enterprise workloads into the cloud, driving up the demand for higher density configurations of cores, memory, and storage," said Kuba Stolarski, research director for Infrastructure Platforms and Technologies at IDC, in a statement. "As systems technology continues to evolve towards pooled resources and composable infrastructure, the emergence of these next-generation workloads will drive net-new growth beyond traditional enterprise workloads."

CRN breaks down the top five market share leaders who sold the most cloud infrastructure in the first quarter of this year.

Private And Public Cloud Breakdown

Public cloud infrastructure quarterly revenues have more than doubled in the past three years to $9 billion in the first quarter of 2018, growing 56 percent year over year, according to IDC. Private cloud sales reached $3.9 billion, increasing 26.5 percent compared to the same quarter one year ago.

"While all infrastructure segments continued their strong growth, public cloud has been growing the most. IDC expects this trend to continue through the end of 2018," said IDC's Stolarski.

Combined public and private cloud revenues represented 46 percent of the total worldwide IT infrastructure spending, up from 42 percent one year ago. Traditional infrastructure, which means non-cloud sales, represented 54 percent of the total infrastructure spending. Traditional infrastructure revenue grew 22 percent year over year to $15.1 billion.

ODM Direct

Q1 Market Share: 34.9%

Q1 Cloud Infrastructure Revenues: $4.5 Billion

"Hyperscaler data center expansion and refresh continued to drive overall cloud IT infrastructure growth in the first quarter," said IDC's Stolarski.

Original design manufactures (ODM) direct captured the largest market share of 34.9 percent, up from 32.7 percent year over year. Revenues for these manufacturers climbed to $4.5 billion, up 55 percent from the $2.9 billion generated during the same quarter one year ago. Public cloud leaders and hyperscale data center operators are designing their own cloud infrastructure and having ODM's build the hardware.

5. Huawei

Q1 Market Share: 3.5%

Q1 Cloud Infrastructure Revenues: $453 Million

Huawei finished fifth in the global market capturing 3.5 percent share, up slightly from 3.1 percent share one year ago. The China-based communications and hardware giant generated $453 million in cloud infrastructure sales during the quarter, up 67 percent year over year. The Asia/Pacific region (excluding Japan) was the fastest growing cloud infrastructure geography in the world, increasing revenues by nearly 75 percent year over year.

4. Inspur

Q1 Market Share: 4.1%

Q1 Cloud Infrastructure Revenues: $533 Million

The China-based server specialist reached fourth place in worldwide cloud infrastructures sales after increasing revenues significantly to $533 million, representing a 176 percent spike year over year. Inspur's market share also climbed from 2.2 percent in first quarter 2017 to 4.1 percent.

3. Cisco

Q1 Market Share: 7.2%

Q1 Cloud Infrastructure Revenues: $923 Million

The San Jose, Calif.-based networking giant came in third place selling a total of $923 million in cloud infrastructure globally, up 11.4 percent year over year. Cisco's market share dropped to 7.2 percent in the first quarter 2018, down from 9.3 percent share in the same quarter one year ago.

2. Hewlett Packard Enterprise/New H3C Group

Q1 Market Share: 11.5%

Q1 Cloud Infrastructure Revenues: $1.48 Billion

Hewlett Packard Enterprise increased cloud infrastructure sales by 27 percent year over year, reaching $1.48 billion to take home the silver medal in the first quarter. Even with the sales success, the Palo Alto, Calif.-based company's market share dropped from 13.2 percent in the first quarter of 2017 to 11.5 percent. Due to the existing joint venture between HPE and China-based New H3C Group, IDC reported combined sales of the two vendors for this market report.

1. Dell Technologies

Q1 Market Share: 15.9%

Q1 Cloud Infrastructure Revenues: $2.05 Billion

The Round Rock, Tex.-based infrastructure giant secured first place in global IT cloud spending, capturing $2.05 billion in revenues for the quarter, up 68 percent year over year. Dell's market share increased to 15.9 percent, up from 13.7 percent in the same quarter one year ago.