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Dell Technologies Debuts as a Cloud Infrastructure Powerhouse

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The Dell-EMC megamerger is now a done deal, and the combined company has already been catapulted to the top ranks of cloud infrastructure providers. According to the latest data from Synergy Research Group, Dell Technologies – had it existed as a single entity during the second quarter (Q2) of 2016 – would already be giving the market leaders a run for their money.

“The race for leadership in providing the infrastructure to build clouds has traditionally been between HPE and Cisco on the hardware side, with Microsoft leading in cloud infrastructure software. Now, however, the newly formed Dell Technologies is challenging those traditional leaders,” said Synergy Research Group chief analyst John Dinsdale, in a research note sent to Datamation.

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“In Q2 Dell and EMC in aggregate was the second largest private cloud infrastructure vendor and the third largest public cloud infrastructure vendor, while majority-owned VMware was the second largest cloud infrastructure software vendor,” continued Dinsdale.

In terms of revenue, Dell and EMC’s combined share of the cloud hardware market (13 percent) came within striking distance of both Cisco (14 percent) and HPE (15 percent), stated the research firm. VMware, which is majority owned by Dell Technologies, is second only to Microsoft in cloud software.

Over the last nine quarters, the data center infrastructure spending has averaged $29 billion. Systems and software destined for the cloud now represent over half of that amount, Synergy said.

“While total spending on data center infrastructure remains relatively flat, cloud share of that spending continues to rise as an ever-increasing portion of computer workloads migrate to either public or private clouds,” said Jeremy Duke, founder and chief analyst at Synergy Research Group. “We are also seeing that within the cloud infrastructure market, hyperscale cloud operators are accounting for an ever-larger share of overall capex,” a trend that is expected to continue well into the future, he added.

Dell first announced it was acquiring data storage systems giant EMC in October 2015 in a mammoth transaction valued at $67 billion. Pursuing opportunities in high-growth areas like the software-defined data center, enterprise mobility, and cloud computing, Dell and EMC’s gamble is already paying off as Synergy’s data shows.

And the future may get brighter.

Earlier this year, IDC projected that cloud IT infrastructure spending will reach $38.2 billion in 2016, an 18.9 percent increase compared to 2015. Non-cloud IT infrastructure spend will dip 4 percent, but it will still account for the majority of all spending at 62.8 percent, said the analyst group.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.

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