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Public Cloud Provider Infrastructure Spending Hits 9-Quarter High

Public cloud providers spent more on infrastructure hardware and software in Q1 2018; and other news.

Public cloud providers spent more on infrastructure hardware and software in Q1 2018 than they have in the past nine quarters, according to new data from Synergy Research Group. Spending was up 32 percent year-over-year in Q1 2018.

Synergy said this growth is significant considering the typical quarterly growth has been in the 10-20 percent range, and that the first quarter usually sees a drop-off after fourth-quarter growth. In Q1, spending was down only two percent from Q4.

Total public cloud infrastructure revenues are over $11 billion per quarter, encompassing servers, OS, storage, networking, virtualization software, cloud security, and management.

ODMs dominate shipments of server and storage hardware, with 25 percent of the market share, followed by Dell EMC, Cisco, HPE, Microsoft, Huawei, and VMware.

“As we saw in our analysis of Q1 hyperscale capex, the hyperscale operators are on a spending spree and continue to crank up their investment in data centers, with much of this spending flowing through to the vendors of data center hardware and software,” Synergy Research Group chief analyst and research director John Dinsdale said. “Hyperscale operators totally dominate the cloud market, so their ongoing growth bodes well for hardware and software vendors – though ODMs continue to aggressively increase their share of the pie. Our forecasts show that IaaS, PaaS, SaaS and public cloud workloads generally are all going to continue to grow rapidly over the next five years, which will continue to drive ever-increasing levels of spending on data center infrastructure.”

Acumatica Raises $25M for ERP Software in the Cloud

Bellevue, Wash.-based Acumatica, a provider of cloud-based enterprise resource planning software, has raised $25 million in a funding round led by Accel-KKR.

The company said the funding will be used to build out its sales force and product line, further developing specialized editions of its software tailored for specific industries, including a recently released Construction Edition. Acumatica runs its software on Amazon Web Services, the Seattle Times said in a report.

"We're very pleased to be partnering with Accel-KKR as we continue to grow and expand into vertical industries," Jon Roskill, CEO of Acumatica said in a statement. "Accel-KKR not only brings the capital required to drive Acumatica's growth, but also additional recruiting and expansion resources to support us in executing our plans. This funding will help in our quest to improve how midmarket businesses operate and deliver value to their customers, and provides Acumatica with a path to profitability."

Workday Acquires Adaptive Insights for $1.55B

Cloud-based HR platform Workday has acquired Adaptive Insights, a provider of cloud-based business planning and financial modeling tools, for $1.55 billion in a deal that is expected to close in Q3 2018.

The company plans to integrate Adaptive Insights’ tools into its existing platform.

“Adaptive Insights is an industry leader with its Business Planning Cloud platform, and together with Workday, we will help customers accelerate their finance transformation in the cloud,” Workday CEO and co-founder said in a statement. “I am excited to welcome the Adaptive Insights team to Workday and look forward to coming together to continue delivering industry-leading products that equip finance organizations to make even faster, better business decisions to adapt to change and to drive growth.”

The acquisition of Adaptive Insights came just days before its impending IPO.

Analysts expect the acquisition to help turn Workday around after a disappointing Q1 earnings announcement, with Seeking Alpha calling it a “huge win for the company.”

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