HP Finally Overtakes Cisco In Cloud Infrastructure Equipment Leadership Battle

New Q2 data from Synergy Research Group shows that HP finally gained leadership of the rapidly growing cloud infrastructure equipment market, having lagged closely behind Cisco through 2013 and 2014. In Q1 the two vendors were tied, but in Q2 HP opened up a lead by achieving much stronger sequential revenue growth. The two leading vendors are each achieving stellar revenue growth in the burgeoning market, but as HP maintained a 13% worldwide market share in Q2, Cisco’s share dropped by half a percentage point. The two are followed by Microsoft, Dell, IBM, EMC, VMware, Lenovo and Oracle. Across the different types of cloud deployment, Cisco continues to hold a commanding lead in public cloud infrastructure while HP has a clear lead in private cloud. Total cloud infrastructure equipment revenues, including hardware and software, are now running at some $16 billion per quarter, having grown by 25% year on year.

HP’s cloud infrastructure leadership is due to dominating the cloud server segment and being a main challenger in storage, while Cisco’s position is due mainly to its dominating the networking segment while rapidly growing its position in servers. Microsoft features heavily in the ranking due to its position in server OS and virtualization applications, while Dell and IBM maintain a strong position across a range of cloud technology markets. Servers, OS, storage and networking combined account for 89% of the cloud infrastructure market, with the balance comprising cloud security, cloud management and virtualization applications.

“The public cloud services market is clearly booming and driving heavy investment in cloud infrastructure, while a rapid transition to cloud is also in full swing in the enterprise IT market,” said Jeremy Duke, Synergy Research Group’s founder and Chief Analyst. “Cisco continues to ride these waves very successfully, but what has enabled HP to grab the lead is the fact that servers and storage account for almost two thirds of the market and HP is now rapidly evolving its huge business in these segments. By contrast, Cisco dominates the relatively much smaller networking segment, while its burgeoning cloud server business still lags far behind HP in scale. The good news for all vendors is that this huge market is growing rapidly and in aggregate the two leaders only account for a quarter of it — much the same as they did a year ago.”