In a sluggish and mature market ripe for disruption, two of the biggest enterprise server vendors, HP Enterprise and Dell, managed to not only hang onto but grow their market share last year.
When it comes to other enterprise infrastructure products, Cisco still has the lead, owning roughly one-third of the enterprise hardware market -- for now.
Analysts at Synergy Research Group recently reported that some of the biggest names in enterprise infrastructure made modest gains last year despite the largely mature market. Synergy charted an average growth of 2 percent across all tracked segments in the market: data center servers, Ethernet switches, voice systems, WLAN, unified communications, routers, and telepresence.
"The overall 2 percent growth shown in this research is actually a step up from the previous year, when spending was essentially flat," John Dinsdale, chief analyst and managing director at Synergy, wrote in an email.
Big enterprise server vendors like HP Enterprise and Dell are imperiled by the rise of the original design manufacturer (ODM) or "whitebox" market. But Dinsdale believes HP, in particular, has qualities that will allow it to hold its own against commodification.
"HP Enterprise has been around a long time, has a broad and deep product range, and has a good reputation," wrote Dinsdale. "Servers are very important to HP Enterprise's future and it acts accordingly. There has for sure been strong growth in ODM-produced servers, but this has tended to impact the service provider side of the market much more so than the enterprise side. It is mainly the big cloud service providers that are buying large volumes of ODM servers."
Last year Techaisle analyst Anurag Agrawal noted a number of reasons why enterprise servers -- and enterprise server vendors -- aren't losing out to the cloud. Mainly, the hybrid cloud is the main cloud model that enterprises are interested in exploring, and they need on-premises hardware to make it happen.
Where exactly does Cisco's dominance show up? In pretty much everything but servers, as its aggregate market share across all segments tracked by Synergy was 33 percent -- up slightly from the previous year. Networking hardware of all kinds has long been Cisco's forte, including enterprise WLAN -- which HP Enterprise has been focusing on since its acquisition of Aruba last year.
But HP Enterprise has yet to dent Cisco's lead in that category, where it enjoys a 5 percent year-over-year growth rate. That's the largest growth of any category tracked by Synergy, barring unified communications and Ethernet switches -- the latter being another of Cisco's mainstays.
Cisco does face threats in telepresence and voice systems, but it's unlikely to come from other hardware vendors. Both of these sectors shrank year-over-year in terms of revenue, in large part because they're easily commodified. Most businesses don't need expensive telepresence hardware if a product like Skype can substitute -- especially with Microsoft pushing Skype as a business solution rather than a family-and-friends chat product alone.