Worldwide server revenue declines marginally: Gartner

Enterprise, SMB segments remain flat with increased virtualisation and cloud adoption

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Worldwide server revenue declines marginally: Gartner Hyperscale data centre segment continues to lead growth, as enterprise, SMB segments flatline.
By  David Ndichu Published  June 7, 2016

Gartner says worldwide server revenue declined 2.3% in the first quarter of 2016, while shipments increased 1.7%.

Worldwide server revenue declined 2.3% year over year in the first quarter of 2016, while shipments grew 1.7% from the first quarter of 2015, according to Gartner. 

"Although revenue declined, the first quarter of 2016 continued with a trend of low-level shipments growth on a global level with a variation in results by region," said Jeffrey Hewitt, research vice president at Gartner. “The drop in revenues in light of shipment increases demonstrates that the servers that shipped during the period had lower average selling prices than those that shipped in the same time frame last year.”

All regions showed a decline in either shipments and/or vendor revenue except for Asia/Pacific, which posted 9.7% growth in revenue and 8.4% growth in shipments for the period. Western Europe grew 1.4% in shipments and 1.5% in revenue. North America posted a 1% increase in shipments but declined 5.9% year over year in revenue.

"The real driver of global growth continues to be the hyperscale data centre segment. The enterprise and small or midsize business (SMB) segments remain relatively flat as end users in these segments accommodated their increased application requirements through virtualisation and considered cloud alternatives," Mr. Hewitt said.

Hewlett Packard Enterprise (HPE) continued to lead in the worldwide server market, based on revenue, with a 25.2% market share. HPE was the only vendor in the top five to experience growth in the first quarter of 2016. Despite a decline of 1.4%, Dell maintained the second spot in the market with 17.3% market share. IBM secured the third position with 9.7% of the market, but experienced the largest decline among the top five vendors.

In server shipments, HPE remained the worldwide leader in the first quarter of 2016, even with a year-over-year shipment decline of 1.6%. HPE's worldwide server shipment share was 19.4%, representing a 0.6% drop in share from the first quarter of 2015.

Of the top five vendors in server shipments worldwide, only Huawei and Inspur produced shipment increases.

 

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