The data center infrastructure market is growing at a good pace as per the latest report of by Synergy Research Group. The demand for public cloud has outgrown in recent years; it displays a moderate upward trend of 5% (YOY) in past two years. At the same time, the private cloud and public cloud spending recorded an increase in demand by 16% and 35%, respectively. The revenue of the non-cloud, traditional data centers though dropped by 18% (YOY).

John Dinsdale, chief analyst and research director at Synergy Research Group, commented, “Spending on hardware and software used to build public cloud continues to grow strongly, while spending on traditional non-cloud infrastructure is on the decline. With own-designed hardware manufactured by ODMs [original design manufacturers] now being such a prominent feature of public cloud infrastructure, these trends are ratcheting up the competitive pressure on the mainstream server, storage, and networking vendors.”

By selling the hardware directly to data center customers, especially those of the hyperscale variety, ODMs ruled the public cloud infrastructure market as a group during Q2, 2017. Moreover, they may continue to rule for several more quarters to come.

In a recent Synergy Research forecast, the firm noted that the world’s 24 Hyperscale companies operate 360 cloud data centers, a figure that is rising by nearly 20 percent each year.

On the server front, ODMs enjoyed a narrow lead in Q2, collectively raking in $3.5 in revenue and claiming 22.6 percent of the market, reported IDC last week. HPE and its Chinese joint venture New H3C Group took second place with $3.3 billion in sales and a 21.3-percent share of the market.

In total, sales of data center infrastructure equipment—including public, private and non-cloud data centers investments—exceeded $30 billion, said Synergy Research. Combined, servers, storage, operating system software and virtualization software, made up the bulk (96 percent) of all sales.