Canalys: 2017 a Record Year for Infrastructure; A “Strong” Year for Channel

Technology infrastructure had a very strong 2017, according to research released by Canalys, an independent analyst firm with offices in Singapore, Palo Alto, the UK and China.

According to Canalys, the value of worldwide infrastructure shipments, including servers, storage and networking products, reached a record US$142 billion in 2017, up 7% on the previous year. Strong growth in servers was the primary factor with server shipments valued at $66 billion. Storage returned to growth after a period of disruption, as spending moved to all-flash and software-defined products. Networking continued to grow, as investment in data center switching and 11ac Wave 2 wireless LANs for campus and branch environments remained strong. Overall, Ethernet switching grew 7% and wireless LANs were up 9%. Service provider routing remained positive at 1%, but enterprise routing fell 9%.

It was also a strong year for channel partners selling all three technology categories. “The channel continued to dominate infrastructure shipments, collectively representing 74% of the worldwide total,” said Canalys principal analyst Matthew Ball. “But direct grew faster, due to the increasing role of Chinese and Taiwanese ODM server vendors selling large volumes to cloud service providers. Direct accounted for 34% of server shipments, compared with 19% for storage and 20% for networking. The massive capital expenditure planned by the hyperscale cloud service providers in upgrading and expanding existing data centers, as well as increasing their geographic presence, will maintain this trend in 2018.”

The top three infrastructure vendors in 2017, Cisco, Dell EMC and Hewlett Packard Enterprise, collectively accounted for 50% of total worldwide shipments, according to the report.

Channel Impact^®
The data provide solid insights into the direction of the industry, demonstrating continued strength of the channel, although mitigated by the growth of direct sales.