The enterprise IT landscape is in a constant state of flux. While headlines often focus on the explosive growth of AI, a deeper look at the data reveals a more nuanced and compelling story. Recent market performance in July 2025 shows that traditional servers are the quiet powerhouse driving overall growth, while other segments like networking and storage face unique challenges.

This report, based on an in-depth analysis of enterprise infrastructure categories—servers, storage, and networking—across key European countries, provides a clear-eyed view of what’s truly happening in the market.

The Real Story: Traditional Servers vs. AI Servers

When you hear about the AI market, you're likely picturing massive growth. And in some cases, you'd be right. In Q2, the AI-capable server market share spiked to 31%, a significant leap from its usual 10%. However, this wasn’t a sign of a new, sustained trend. Instead, it was an outlier driven by a single, massive graphics card deal in the UK.

By July, the market had normalised, and both AI servers and graphics cards saw a decline in revenue. It’s a clear reminder that AI investment is currently characterised by these sharp, sporadic spikes, rather than consistent, month-over-month growth.

So what’s keeping the market afloat?

Traditional servers

These workhorse systems grew at a healthy, double-digit rate in July, largely fuelled by a wave of post-COVID investment and long-overdue hardware refreshes. This steady performance was strong enough to offset the dip in AI-related revenue, pushing the entire enterprise server market to a 1% year-over-year growth. This highlights a crucial point: while AI gets the attention, the fundamental demand for reliable, traditional infrastructure is the backbone of the market.

The Storage Upgrade Dilemma

Enterprise storage presents a different kind of challenge. While performance was nearly flat in July at -0.9%, there's an interesting dynamic at play. On the one hand, gigabyte demand is up, and SSDs are seeing significant growth (22% in July), partly due to a price drop. Data management software also showed growth.

However, these gains were wiped out by declines in hyper-converged infrastructure and disk arrays, which fell by 6%. The core issue? Customers are prioritising more straightforward server upgrades over the more complex process of replacing entire storage systems. Instead, many are simply expanding the memory capabilities of their current systems, delaying full-scale upgrades.

This suggests a key insight for storage vendors: the current market isn't about selling brand-new systems but about providing seamless expansion solutions.

Wi-Fi 7's Early Adopter Problem

Of the three categories, networking remains the biggest challenge. It experienced the steepest decline, falling 7.6% in July. While growth drivers like transceivers and networking software are still active, they are being offset by a 10% decline in switches and a drop in wireless sales.

The primary reason for the wireless slump is the stalled transition to Wi-Fi 7. Although the technology is growing, it's still in the "early adopter" phase. Many businesses are still satisfied with their existing Wi-Fi 6 systems and don't see compelling use cases to justify the cost and effort of an upgrade.

For vendors, this is a clear signal: the market needs more than just new features. It needs to be convinced of a tangible value proposition for upgrading.

Diverging Market Dynamics Across Europe

The overall market performance in Europe paints a mixed picture, with significant variations from country to country.

• Italy stands out as a strong performer, with servers up by 35% and storage growing by 2%. The one drag on its performance is networking, which declined by 30%.
• Spain also saw impressive growth, with the server market doubling in July.
• In contrast, France is facing significant economic challenges. The country saw double-digit declines in both servers and storage, with only minor growth in networking.

This highlights a key insight: while broad trends are important, local economic conditions and market-specific dynamics can create entirely different realities on the ground.

The Bottom Line

While AI deals will continue to create headlines, the true health of the enterprise IT market is driven by foundational factors: overdue refreshes, strategic upgrade decisions, and a need for compelling use cases.

The market is in a fascinating transition period. The coming quarters will reveal how vendors adapt to these nuanced challenges—whether they can make a more compelling case for Wi-Fi 7, simplify the storage upgrade process, and continue to leverage the steady demand for traditional infrastructure.

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