Cisco Benefits from Cloud-Driven Data Center Networking Market

September 19, 2011

New data from TeleGeography partner Synergy Research Group show that the global data center equipment market grew 10 percent between Q2 2010 and Q2 2011, with an average annual growth rate that is closer to 20 percent. According to Synergy’s Data Center Research Service, networking infrastructure now accounts for 15 percent of the data center equipment market. Cisco dominates this segment, with a market share of 49 percent, followed by Brocade and Juniper. Computing equipment remains the largest segment of the data center equipment market, and IBM and HP each account for over 30 percent of this segment. The market for data center storage equipment is more fragmented. EMC leads, with a market share of over 25 percent, but five other vendors each have market shares of 8 to 13 percent.

Worldwide Data Center Market, Q2 2011

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Source: Synergy Research Group/TeleGeography

Cloud computing IaaS (Infrastructure as a Service) has emerged as a key driver of growth in the data center equipment market. Revenues associated with IaaS account for 25 percent of the data center equipment market, and are projected to grow at a substantially higher rate than the market as a whole. Networking equipment accounts for approximately 25 percent of spending on IaaS, and Cisco is the clear leader in this segment, accounting for approximately half of the market.

“Vendors big and small can benefit from growing investment in cloud computing and data centers,” said Synergy Research Group’s Jeremy Duke. “Strong market growth in all major world regions is creating new business opportunities. For example, Cisco’s dominance in the networking infrastructure segment is not preventing Juniper, F5, and RiverBed from increasing their market shares and growing their revenues substantially.”

Synergy Research Group’s Data Center Research Service provides data, analysis, and forecasts of the data center equipment market.

Synergy Research Group is a strategic partner of TeleGeography, providing market intelligence, analytics, and strategic consulting services to the networking and telecom industries.

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