Channel grabs 74 per cent of infrastructure market - Canalys

Channel continues to dominate infrastructure shipments in a record year for the market

Channel firms dominated 2017 infrastructure shipments worldwide, helping to boost the market to a record year, according to Canalys figures released today.

The analyst firm pegs the market at an unmatched $142bn (£101bn) for the year - a seven per cent increase on 2016's numbers. Servers grew 12.2 per cent to $66bn (£47bn), networking grew 4.3 per cent to $50bn (£35bn) and storage 1.6 percent to $26bn (£18bn).

"The channel continued to dominate infrastructure shipments, collectively representing 74 per cent of the worldwide total," Canalys principal analyst Matthew Ball said.

Server growth was partially due to hyperscale cloud service providers' "ongoing" datacenter expansion, Canalys' announcement said. It noted "the start of a new enterprise refresh cycle following the launch of the next generation of Intel and AMD processors increased server shipment value".

However, Ball said that due to the growth of Chinese and Taiwanese ODM server vendors selling large volumes to cloud service providers, direct sales grew faster than channel sales in the overall infrastructure market. He noted that 34 per cent of server shipments were direct sales (compared to 19 per cent of storage and 20 per cent of networking shipments).

"The massive CapEx planned by the hyperscale cloud service providers in upgrading and expanding existing datacenters, as well as increasing their geographic presence, will maintain this trend in 2018," Ball said.

Storage, meanwhile, saw a return to growth following "a period of disruption" from all-flash and software-defined, which Canalys says offset traditional HDD storage arrays' drop.

In networking, Canalys pointed to continued strength from datacenter switching and 11ac Wave 2 wireless LANs (WLANs) for campus and branch environments. It says ethernet switching grew seven percent and WLANs nine per cent. Service provider routing stayed positive at one percent, while enterprise routing fell nine percent.

Market leaders

Cisco, Dell EMC and Hewlett Packard Enterprise (HPE) represented 50 per cent of infrastructure shipments

Cisco maintained a 20 per cent lead thanks to its networking strength.

"Its focus is on moving its predominantly hardware-centric customer base to software and subscriptions," Ball said.

Meanwhile, in its first full year of operations after the merger that made it the leading servers and storage player, Dell EMC grew its infrastructure shipments market share to 15 per cent and "was one of the fastest-growing vendors through the channel", Ball said.

HPE controlled 14 per cent market share.

"The focus of its server business has shifted to higher-value segments, with growth in HCI and HPC. The acquisition of Nimble boosted its storage business last year, while Aruba is driving growth in WLANs as part of its intelligent edge strategy," Ball said.