Global server revenue declines, despite Q1 shipment growth

Server revenues decline 4.1% year over year, despite Q1 2014 shipment growth of 1.4%

Tags: Dell CorporationGartner Inc. (www.gartner.com/technology/home.jsp)HPHewlett-Packard CompanyIBM (www.ibm.com)
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Global server revenue declines, despite Q1 shipment growth Unix servers were down 19.9% in shipments and 16.9% in revenue compared to the same period last year. (Getty Images)
By  Tom Paye Published  May 29, 2014

Despite worldwide server shipments growing by 1.4% in the first quarter of 2014, server revenue declined 4.1% year over year, according to the latest insights from Gartner.

While x86 servers showed 1.7% growth in units for the year, with a 2.8% in revenue, RISC/Itanium Unix servers declined in the first quarter of 2014, Gartner said. Unix servers were down 19.9% in shipments and 16.9% in revenue compared to the same period last year.

"The first quarter of 2014 produced relatively weak growth on a global level with a variation in results by region," said Jeffrey Hewitt, research vice president at Gartner.

"All regions showed a decline in either shipments or revenue except for Asia/Pacific. Asia/Pacific posted a 3.3% increase in revenue and an 18% increase in shipments. In Japan, shipments increased by 13.5%, but revenue declined by 9.2% while in Western Europe shipments declined by 4.8% and revenues rose 6.7%."

In the EMEA region, while server shipments continued to decline in the first quarter of 2014, revenues grew for the first time after 10 consecutive quarters of year-over-year declines.

Server shipments totalled 547,900 units, a decrease of 6.1% from the first quarter of 2013, and server revenue totalled $3bn, an increase of 2.5% in the first quarter of 2014.

"Although shipments contracted, the fact that the server market has finally shown revenue growth will be a welcome relief for server vendors," said Adrian O'Connell, research director at Gartner. "The business environment in EMEA remains challenging, but the severe declines that we've witnessed in the non-x86 product segments have abated, at least in the first quarter of 2014."

HP led the worldwide server market in terms of revenue in the first quarter of 2014, Gartner said. The vendor ended the quarter with $2.9bn in revenue, gaining a total of 25.5% market share worldwide. IBM was second-placed with 19.8% share and Dell was third with 17.7%.

However, all these companies still saw declines from a year earlier. Indeed, Gartner said that Cisco was the only vendor in the top five that increased revenue in the first quarter of 2014, posting growth of 37% compared with the same quarter in 2013.

In terms of server form factors, x86 blade servers decreased 3.9% in shipments, but increased 5.2% in revenue for the quarter, Gartner said. The rack-optimised form factor climbed 1.4% in shipments and 1.7% in revenue in the first quarter of 2014.

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