Worldwide server market grows 4.8% in revenue

Q3 2014 marks the second consecutive quarter that market sees YoY growth, IDC says

Tags: Dell CorporationHPIBM (www.ibm.com)IBM Middle EastIDC Middle East and Africa
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Worldwide server market grows 4.8% in revenue Server unit shipments improved 5.7% year over year in Q3 2014 to 2.38 million units
By  Tom Paye Published  December 10, 2014

Vendor revenue in the worldwide server market increased 4.8% year-over-year to $12.7bn in the third quarter of 2014, marking the second consecutive quarter that the market has seen year-over-year growth, according to IDC.

Server unit shipments improved 5.7% year over year in Q3 2014 to 2.38 million units as investments in hyperscale data centre capacity expansion continue to aggressively reshape the core server market, IDC said. The research house added that it continues to see signs of a server refresh cycle, which it expects will continue to lift the market into 2015.

On a year-over-year basis, volume systems experienced 8.8% revenue growth, IDC said, explaining that this was the sixth consecutive quarter that volume system demand increased year over year.

Mid-range systems also experienced growth of 18.4% year-over-year as technology refresh cycles began to positively impact the segment. However IDC said that high-end enterprise systems experienced a year-over-year revenue decline of 23.2%, primarily because of difficult year-over-year comparisons and product cyclicality issues.

"The server market continues to be deeply impacted by the shift to the third platform and the effect of mobile, cloud, social and big data analytic technologies. IDC has seen increasing market influence from Greater China, hyperscale data centres, ODMs and native Chinese OEMs, all of which grew sharply in the third quarter," said Matt Eastwood, group vice president and general manager, Enterprise Platforms, at IDC.

"We also saw the continuation of a cyclical enterprise refresh cycle, which IDC expects will continue well into 2015. This refresh will be further accelerated by Microsoft's announcement that it is ending support for Windows Server 2003, coupled with Intel's recent release of its Grantley Xeon EP."

In terms of market share, IDC said that HP held the number-one position in the worldwide server market with 26.5% vendor revenue share for the third qarter. However, the vendor saw a revenue decline of 0.5%, which included improving demand for x86-based ProLiant servers and continued weakness in Itanium-based Integrity server revenue, IDC said.

IBM held the number-two spot with 18.2% share for the quarter, but its revenue decreased by 17.8% compared to the year-ago quarter. Demand for all three IBM server brands - x, Power and z - declined sharply year over year, IDC said.

Dell maintained the third position with 17.8% vendor revenue market share in Q3 2014 as its revenue increased 9.5% compared to Q3 2013. Cisco and Oracle ended the quarter with the number four and five market positions with 6.2% and 4.1% vendor revenue share, respectively, IDC said.

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