Ongoing customer build-outs of hybrid environments is fueling cloud components growth as IT vendors modernized hardware and software portfolios.
According to a report from Technology Business Research (TBR) the cloud components market, which encompasses the foundational building blocks for on premises cloud environments, will grow from an estimated $27 billion in 2016 to $41 billion in 2021 at an 8.4% CAGR.
Cloud hardware components revenue will generate most of total cloud components revenue; however, we expect long-term market growth will be sustained by cloud software components as hybrid cloud demands rise and underlying cloud infrastructure becomes commoditized, TBR said.
Sanjay Medvitz, TBR cloud analyst, said, “Enterprise hybrid IT environments continue to grow, increasingly encompassing disparate on-premises and cloud assets as well as infrastructures from multiple vendors, driving up the importance for software solutions that provide efficient management, orchestration and cloud services capabilities to ease complexities.”
“Accordingly, vendors such as IBM and Oracle are shifting focus to cloud software businesses that offer high-value opportunities for long-term success,” Medvitz said.
From a hardware perspective, customers’ ongoing migrations to public cloud services and software-defined storage-enabling hyper converged platforms will render standards-based servers as critical aspects of cloud computing environments across a range of customer segments.
Meanwhile, TBR notes that customers will invest in flash storage capabilities, along with gradual build-outs of virtualized network implementations to further accelerate performance, simplicity and reliability of their hybrid and heterogeneous cloud data centers.
Industry stalwarts Hewlett Packard Enterprise, IBM, Dell EMC and Cisco held top market share among cloud components vendors in 2016, leveraging legacy hardware and software strengths and large install bases alongside investments in private and hybrid cloud-enabling technologies such as hyper-converged to win customer modernization engagements.
Market leaders will continue to modernize legacy assets, innovating hardware and software together to create common architectures and building out cloud based versions of traditional solutions to promote flexible cloud on-ramps and meet evolving customer hybrid IT needs.