Cisco, HP, Dell – cloud service laggards, falling enterprise IT market shares

Last week we looked at how cloud computing markets compared at the country level by cross-tabulating the growth in spending on cloud services against the proportion that represented of all enterprise computinng (cloud service plus server, storage system, enterprise networking and infrastructure software spending). This week I thought you might want to have a look at the same measurements for the leading cloud service vendors.

There are some very important differences here between their status as cloud suppliers. We can classify them into at least three types:

  • The Pioneers – Amazon, Salesforce and other cloud-only vendors who were and remain the driving force behind this change in enterprise computing.
  • The Converted – IBM, Microsoft, Oracle, Fujitsu and others who have made big investments in building data centers from which to provide their own IaaS, PaaS and/or SaaS offerings.
  • The Laggards – HPE, Dell EMC and Cisco who made no significant early commitments to providing their own cloud services and for whom it’s getting very late to enter.

Why are these differences important? Cloud service spending around the world is growing 30%, and enterprise computing spending now split in almost equal thirds between enterprise hardware, infrastructure software and cloud services (see Figure).

Laggards Cisco, Dell EMC and HPE who (with IBM) are the largest enterprise computing suppliers worldwide decided ‘not to compete with their existing customers’ by offering their own cloud services early on… and while they all have some offerings now, but they’re definitely playing ‘catch up’. One major problem is that the largest public cloud suppliers don’t need to rely on them since they make their own enterprise systems from components sourced directly from Intel and others. Of the three Dell EMC has done most and through owning Virtustream now has a growing (but relatively small) cloud service business; however all three will have to do much more to avoid being eclipsed as cloud services rapidly become the largest part of enterprise computing spending.

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