Datacentre market slows

Big snail in Old TaipeiThe datacentre market began to lose momentum in Q1 as the COVID-19 crisis halted hardware spending in the enterprise space according to a report from Synergy Research Group.

In a freshly baked report  Synergy said that software spending declined by two percent globally in the first quarter to $35.8 billion.

The Q1 decline was driven by a sharp drop in enterprise and service provider spending, which fell by four per cent during the quarter to $22.5 billion, Synergy wrote.

Public cloud spending, however, helped abate the decline, growing by three per cent. The company said that COVID-19 pandemic has had “little impact” on the public cloud datacentre infrastructure market.

It follows several consecutive quarters of growth in datacentre spending. Synergy claims that datacentre hardware and software spending grew by two percent in 2019, with public cloud up by seven per cent and traditional datacentre spending down by seven percent.

“Cloud service revenues continue to grow by almost 40 per cent per year, enterprise SaaS revenues are growing by almost 25 per cent, search/social networking revenues are growing by over 15 per cent, and e-commerce revenues are growing by over 20 per cent – all of which are helping to drive growth and increased spending on public cloud infrastructure”, said John Dinsdale, a chief analyst at Synergy Research Group.

“Notably, most of these services are either little impacted by COVID-19 or may be stimulated by changed enterprise and consumer behaviour. On the other hand, many enterprises have been negatively impacted by the pandemic resulting in increased pressure on capital budgets and more impetus on shifting workloads to public cloud providers.”

Microsoft led the enterprise space by spending during the quarter, according to Synergy, followed by Dell, HPE, Cisco and VMware.

Synergy claims Dell is leading the market in servers and storage, while Cisco dominates the networking segment. Microsoft, meanwhile, holds a leading position in the server OS and virtualisation applications space.