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Data Center Server Revenues Decline by One Percent in 2017

By Sean Michael Kerner (Send Email)
Posted January 5, 2018

2017 was a mixed year for servers, with continued growth in the cloud and negative growth everywhere else.

Data Center Server revenues declined by one percent in 2017 according to data published on Jan. 3 by Synergy Research Group. The data center server revenue decline stands in contrast with other sectors of the IT infrastructure market, which grew in 2017. Data center server spending was however the single largest part of the overall enterprise infrastructure market size.

According to Synergy Research, switch and router networking revenue grew by four percent, while the market for cloud is growing at a 24 percent clip.

Synergy Research reported that from Q4 2016 to Q3 2017, total spend on hardware and software to build cloud infrastructure approached $80 billion. That spending was evenly divided between public and private clouds, although Synergy Research did report that public cloud is now growing more rapidly than private cloud.

Even with the growth of the cloud, money is still being spent on enterprise infrastructure.

"Despite a burgeoning public cloud market, enterprise IT infrastructure spending was still on the rise in 2017 and will be for the next five years," Synergy Research Group’s founder and Chief Analyst Jeremy Duke stated.

"The focus of that spending is changing, however," Duke continued, "with a growing emphasis on hosted solutions, subscription-based business models and emerging technologies. Those changes will continue to present challenges for incumbent vendors and opportunities for new market entrants."

Sean Michael Kerner is a senior editor at ServerWatch and InternetNews.com. Follow him on Twitter @TechJournalist.

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