Worldwide Server Market Revenue Jumps 6.3 Percent In Q2 2017

by CXOtoday News Desk    Sep 14, 2017

Server

Vendor revenue in the worldwide server market increased 6.3 percent year over year to $15.7 billion in the second quarter of 2017 (2Q17) states a study by IDC.

Overall server market growth rebounded after several slow quarters as much of the market had been waiting for availability of Intel’s new Skylake processors. While demand from cloud service providers propped up overall market performance, many other areas of the server market are still stagnant. Worldwide server shipments increased 1.9 percent year over year to 2.45 million units in 2Q17, the study noted.

Volume server revenue increased by 8.3 percent to $12.9 billion, while midrange server revenue grew 19.6 percent to $1.5 billion. Demand for high-end systems experienced a year-over-year revenue decline of 18.9 percent to $1.3 billion. IDC expects continued long-term secular declines in high-end system revenue.

“Hyperscalers as a group made a large deployment push in the second quarter led by Amazon, which alone accounted for more than 10percent of server units shipped in the quarter,” said Kuba Stolarski, research director, Computing Platforms at IDC. “As hyperscalers tend to lead the market on most architectural updates, we expect the rest of the market to catch up over the next several quarters. As the market cycles through this refresh, we are seeing changes in vendor portfolios with new modular system designs and a greater focus on accelerator technologies, as well as the continued evolution of the role of cloud services in corporate IT.”

HPE/New H3C Group remained first in the worldwide server market with 21.3percent market share in 2Q17, as revenue decreased 8.4 percent year over year to $3.3 billion. Dell Inc maintained the second position in the worldwide server market with 17.7percent of vendor revenue for the quarter and 7.0percent year-over-year growth to $2.8 billion. IBM and Cisco were statistically tied for the third market position. Lenovo was ranked fifth with 5.3percent share and revenue declining 13.9percent to $834 million. The ODM Direct group of vendors grew revenue by 48.1percent to $3.5 billion.

Here are the key server market findings:

·         On a geographic basis, Central and Eastern Europe (CEE) was the fastest growing region with 13.5percent year-over-year growth, followed by Asia/Pacific (excluding Japan) with 12.9percent. Within Asia/Pacific, China had strong growth of 10.3percent. The United States increased 7.1percent, Japan declined 2.2percent, Western Europe increased 2.7percent, Latin America declined 11.5percent, and the Middle East and Africa declined 3.3percent.

·         Demand for x86 servers increased 10.4percent in 2Q17 with $14.3 billion in revenues. Non-x86 servers declined 21.5percent year over year to $1.5 billion.

·         HPE and Dell Inc were in a statistical tie for first place in unit share, with 20.7percent and 20.1percent share of worldwide shipments, respectively.