A new report from International Data Corporation shows that Lenovo’s troubled server group is showing signs of recovery – at least in terms of sales targeting cloud information technology spending. Meanwhile, Cisco sales surge, cutting into market share held by leaders HP and Dell.

Lenovo pulled into a tie for fifth place with IBM after increasing cloud infrastructure-related sales by 7.3 percent to $295 million compared to 2015 fourth quarter sales.

Big Blue sales slipped, meanwhile, by 3 percent to some $345 million.

NetApp joined the fifth-place tie by growing sales 3 percent. (IDC declares a tie when there is 1 percent or less difference in quarterty revenue.)

Lenovo has made numerous management and organizational changes in recent months as it seeks to turn around the server business group, which is based in the Triangle.

Cisco, meanwhile, surged a whopping 23 percent to just over $1 billion in sales. Its market share also climbed strongly, hitting 11/3 percent from 9.8 percent

Sales at Dell and HP both fell, to $1.6 billion and $1.35 billion respectively – drops of 3.5 and 3 percent.

Huwaei ranks a distant fourth at $435 million in sales.

Overall market grows

IT cloud sales (server, storage, and Ethernet switch) climbed collectively in the quarter by more than 9 percent year-over-year to $32.6 billion for the year and 7.3 percent in the fourth quarter to $9.2 billion. However, IDC noted that the rate of growth has slowed.

“Growth slowed to single digits in 2016 in the cloud IT infrastructure market as hyperscale cloud datacenter growth continued its pause,” said Kuba Stolarski, research director for Computing Platforms at IDC, in the report.

“Network upgrades continue to be the focus of public cloud deployments, as network bandwidth has become by far the largest bottleneck in cloud datacenters. After some delays for a few hyperscalers, datacenter buildouts and refresh are expected to accelerate throughout 2017, built on newer generation hardware, primarily using Intel’s Skylake architecture.”

The cloud remains a huge driver for IT spend, now accounting for 33.4 percent of all spending and 37.2 percent in the last quarter, IDC notes. Non-cloud IT spending actually fell 9 percent year-over-year, according to IDC.

Read more at: