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EMEA server shipments decline 5.9%

Demand for servers in the region remained contrained for Q2 2013

EMEA server shipments decline 5.9% in Q2 2013.
EMEA server shipments decline 5.9% in Q2 2013.

In Europe, the Middle East and Africa (EMEA), server shipments in Q2 2013 surpassed 550,000 units, a decrease of 5.9% from the same period last year, according to Gartner. Server revenue totaled $3.1 billion in the quarter, a decline of 4.6% from the same quarter last year.

"Demand for servers in EMEA remained constrained in the second quarter," said Adrian O'Connell, research director at Gartner. All three EMEA sub-regions saw server revenue decrease in the second quarter of 2013. In Western Europe, revenue declined 1.6%; in Eastern Europe it fell 17.9% and the Middle East and Africa region decreased 9%.

"This was the seventh consecutive quarter for shipment decline and the eighth consecutive quarter for revenue decline, showing an even more sustained period of weakness than the one we saw during the economic downturn that began in 2008," said O'Connell.

In terms of vendor performances, Dell and Fujitsu remained the only two vendors from the top five to show revenue growth. The EMEA market lacks the hyperscale segment growth that other regions benefit from. This means that vendors in the region are more exposed to the global weakness in enterprise sales.

In the second quarter of 2013, x86 server revenue decreased 4.7% in EMEA, while RISC/Itanium UNIX revenue fell 22.6%.

"Weak enterprise demand, combined with consolidation and platform migration, continued to dampen the EMEA server market," said O'Connell. "In addition to weak demand, established vendors are increasingly challenged by relatively-new vendors such as Cisco, Asia/Pacific-based suppliers such as Lenovo and Huawei, and original design manufacturers selling directly to large end-users. While the server market in EMEA is weak, the underlying trends are highly dynamic. Opportunities remain for vendors who are agile enough to position themselves in the context of shifting market dynamics."

In the second quarter 2013, worldwide server shipments grew 4% year-on-year, while revenue declined 3.8% from the second quarter of 2012, according to Gartner. 

"The global server market remains in a relatively weak state overall," said Jeffrey Hewitt, research vice president at Gartner. "The only real regional bright spot was Asia/Pacific with growth of 10% and 21.7% year on year in terms of revenue and shipments. Canada was the only other region that grew in both revenue and units [6.3% in revenue and 2.7% in units] while Latin America was close to flat for revenue but increased by 1% in terms of shipments. The US also grew in terms of shipments by 1.9% year-on-year but declined in revenue by 5.1%. x86 servers managed to produce an increase of 4.5% in units for the second quarter, and 2.1% in revenue. RISC/Itanium Unix servers continued to decline at 27.4% in units and 25.3% in vendor revenue compared to the same quarter last year. The ‘other' CPU category, which is primarily mainframes, showed an increase of 6.9% in revenue."

IBM had the lead in the worldwide server market based on revenue for the second quarter of 2013, the company posted worldwide server revenue of nearly $3.2 billion for a total share of 25.6%. The biggest revenue contribution was from its System z. 

In server shipments, HP remained the worldwide leader in the second quarter of 2013 in spite of a year-on-year shipment decline of 13.6% for the quarter. HP's worldwide server shipment share was 23.9% representing a 4.8% decrease in share from the same quarter in 2012.

In terms of server form factors, x86 blade servers declined by 3% in shipments and 4.5% in revenue for the quarter. The x86 rack-optimised form factor climbed 3.9% in shipments and 2.4% in revenue for the second quarter.