Sales in infrastructure hardware to support private and public cloud services are surging this year with Cisco cutting into the lead of Dell and HPE. In fact, cloud-related spending is going up while traditional non-cloud hardware spending is going down. What’s happening?

“After a weak performance during 2016, storage purchases for cloud IT environments had a strong rebound in the first quarter, driving the overall growth in this segment,” said Natalya Yezhkova, research director for Enterprise Storage at IDC.

Cloud IT hardware includes servers, storage and Ethernet switches.

Sales climbed nearly 15 percent year-over-year in the first quarter to some $8 billion.

Cisco, which has a major campus in RTP, led the surge with sales climbing 8.7 percent to $902 million. That’s good for a market share of 11.3 percent.

Dell and HP saw their sales drop to $1.3 billion and $1.12 billion respectively for market shares of 16.2 percent and 14 percent.

IDC notes that “cloud IT infrastructure sales as a share of overall worldwide IT spending climbed to 39% in 1Q17, a significant increase from 33.9% a year ago.”

“Overall, the first quarter set a strong beginning of the year for the cloud IT infrastructure market. With positive dynamics in purchasing activity by hyperscalers across all technology segments we expect a strong year ahead for the fastest growing public cloud segment. And as end users continue to embrace the benefits of private cloud infrastructures, spending in this segment will also expand,” Yezhkova explained. 

Public cloud spending climbed 22 percent to $4.8 billion. Private cloud investment increased 22 percent to $4.8 billion.

Biggest gainer was storage, up nearly 50 percent year-over-year.

However, IDC points out overall IT hardware sales for storage-related gear fell for servers and switches.

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