A new report from Synergy Research Group issued this week indicates that when it comes to computing systems, storage systems and networking infrastructure, HP and IBM are vying for leadership, with Cisco fast closing the gap.

Synergy’s 4Q11 Cloud Equipment Market Share report says that in the fourth quarter of 2011, overall revenue in this field hit $10.6 billion, bringing the total for the year up to $39.4 billion – up fifteen percent from 2010. Interestingly, but not entirely unexpectedly, North America is still number one in cloud computing equipment purchases, accounting 43% of the market. But EMEA and Asia Pacific are rapidly growing at a rate that outpaces North America.

When it comes to vendors, HP accounted for approximately 17.4% of that overall $39.4 billion figure, with IBM close behind at 15.9%. It’s worth noting that HP grew its cloud equipment business revenues 10% last year, while IBM only improved 2%. In 2010, they were neck and neck, Synergy says. Cisco had a huge year-over-year improvement in its cloud equipment revenues of 23% and leads the networking subset of the market, but still lags behind the other two in overall market share. Also of interest is the fact that Cisco is apparently making headway into the compute market with its blade servers.

Services Angle

What I get from these numbers is that IBM is largely resting on its laurels – second place in an almost $40 billion industry is nothing to be ashamed of, but just by the numbers it seems like HP is really accelerating its play. But in the short term, even those vendors who didn’t win, place or show are bound to reap some momentum from the cloud boom.

“The vendors that provide infrastructure for cloud services have the opportunity to benefit greatly from this surge — you don’t see many $40 billion markets growing by 15% per year,” said Synergy Research Group Founder Jeremy Duke in a statement.

It’s easy for end customers of the cloud to forget that just because you don’t manage hardware, that doesn’t mean it isn’t needed. IT service providers need to build solid data center infrastructure if they want to meet the challenges presented by the cloud. And while service providers are trying to move past hardware roots – those roots are still there.