Server Shipment Market Shows Weak Growth In Q3

by CXOtoday News Desk    Dec 04, 2013

server

In the third quarter of 2013, worldwide server shipments grew around 1.9% year-on-year, while revenue declined 2.1% from Q3 2012, according to Gartner.

According to Jeffrey Hewitt, Research VP at Gartner, growth was weak overall with the exception of Canada, Middle East and Africa and the US that exhibited positive vendor revenue growth. In shipments, the Middle East and Africa had the greatest increase at 13% compared to same period last year. “x86 servers maintained low levels of growth at 2.1% in units and 4.4% in revenue. Unix servers continued to decline at 4.5% and showed 31% dip in vendor revenue compared to Q3 2012. Hewitt said mainframes on the other hand, showed an increase of 7.8.

In terms of vendor revenues, HP had the lead in the worldwide server market with over $3.4 billion for a total share of 27.6% in Q3 2013. It showed a 2.2% year-on-year rise. In server shipments, HP again remained the worldwide leader in the third quarter of 2013 with a year-on-year shipment increase of 5.4%. HP’s worldwide server shipment share was 27% representing a 0.9% increase in share from the same quarter in 2012.

IBM ranked second with its revenue declining 19.2% with its mainframe business diminishing. Fourth-ranked Fujitsu was amongst the three vendors in the top five to see a revenue decline, at 1.5%. Cisco, ranked in the sixth position, closed the gap with fifth-ranked Oracle in the third quarter of 2013, with less than 1% market share difference between the two vendors.

Cisco was also the only top five vendors to exhibit a shipment growth in the third quarter of 2013, achieving a double-digit shipment growth. Gartner believes, Cisco’s focus on the blade server segment is helping it to achieve strong competitive gains at a time when the overall market is getting increasingly constrained.

Of the top five vendors in server shipments worldwide, only HP and Huawei produced shipment increases in the third quarter of 2013, according to Gartner.

In terms of server form factors, blade servers fell 1.5% in shipments, but grew 3% in revenue in the quarter. The rack-optimized form factor climbed 2.6% in shipments and, but fell 1.8% in revenue for the third quarter of 2013.

From a regional perspective, both Western Europe and Eastern Europe declined in revenue, with a decline of 4.8% and 13%, respectively. The Middle East and Africa was the only region to exhibit revenue growth with an increase of over 12%, said the report. “Weak demand, especially in the European market and newer level of architectural shifts are posing considerable challenges for vendors that have relied on high-end platforms in the past. Gartner expects the fourth quarter to remain weak, making 2013 a tough year for server vendors.