How'd enterprise infrastructure spending fare in 2016? A wee bit down.
According to an analysis from Synergy Research Group, while many individual categories for enterprise IT infrastructure saw growth, a few key segments plunged heavily to bring overall spending down by 1 percent.
Much of that drop was due to steep declines in three categories that have long been decaying, and 3 to 8 percent growth in other categories wasn't quite enough to offset the general loss.
Of the big winners, the second biggest jump was in network security (up 4 percent), as everything from ransomware to a nonstop barrage of hardware-level exploits have demanded enterprises step up their efforts. WLAN vendors saw the biggest percentage leap: almost 8 percent.
That said, these leaps were in markets that remain relatively small. WLAN's worldwide market size is slightly more than $4 billion; network security clocks in at around $10 billion.
Synergy Research GroupBut when it comes to the two biggest market segments for enterprise IT spending -- datacenter servers, and switches and routers -- the lack of growth there was felt strongly. Network hardware (around $27 billion a year) barely edged out 1 percent growth, while datacenter servers lost a whopping 5 percent -- a huge slice for a market that's a $31-billion-a-year business.
The declines aren't hard to trace. As more IT is either migrated into the cloud or done there natively to begin with, there's less of a demand by rank-and-file enterprise IT for conventional hardware. There's still clearly demand for networking devices, as you need that hardware to connect to your cloud datacenter in the first place, but the big leap in WLAN sales points toward a growing market for supporting that connectivity in-house.
Two other areas that were hit hard in 2016 have both been losing out for a while. Enterprise voice systems -- long on the wane since the arrival of unified communications (UC) systems and open source solutions like Asterisk -- with a $7.5 billion market share dropped about another 5.5 percent. Telepresence, a $2 billion market that shrank 6 percent of its growth, has been dying off not only because of UC, but also because of consumer-level, commodity solutions like Skype. (UC itself, with a world market share about the size of WLAN's, perked up by another 3 percent.)
If there's a single name that continues to dominate across all these different segments, it's Cisco, says Synergy. The networking giant commands 33 percent of the total market share, or "market leads in six of the seven segments." In the No. 2 slot overall is HP Enterprise (16 percent market share), which has the mixed honor of being No. 1 in datacenter servers -- the one category with both the biggest market share and some of the biggest losses across all the categories. Between those two, Cisco stands a slightly better chance of weathering the continued flight of enterprise IT to the cloud, since it can operate well on either side of that divide.