Global server market sees 2.5% YoY bump in second quarter
Continued refresh cycle of post credit crunch infrastructure drives growth: IDC
Worldwide server market revenue increased 2.5%, year on year, to $12.6bn in the second quarter of 2014, according to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker.
Server unit shipments improved 1.2%, year on year, in Q2 2014, to 2.2m units as investments in hyper-scale data centre capacity were largely offset by consolidation, which continued to be a strategic focus for many large and small customers around the globe. Additionally, IDC continues to see signs of a server refresh cycle that is expected to lift the market.
On a year-on-year basis, volume systems experienced 4.9% revenue growth. This was the fifth consecutive quarter that volume system demand increased year on year. Midrange systems also experienced growth of 11.6%, year on year, as technology refresh cycles began to positively impact the segment. Meanwhile, high-end enterprise systems experienced a year-on-year revenue decline of 9.8%, primarily due to difficult annual comparisons in the segment.
"The server market is experiencing the beginning of a cyclical refresh cycle as systems deployed shortly after the financial crisis are retired and replaced," said Matt Eastwood, group vice president and general manager, Enterprise Platforms at IDC.
"IDC expects this refresh cycle will continue well into 2015 and be further accelerated by Microsoft's announcement that it is ending support for Windows Server 2003 coupled with Intel's forthcoming release of the Grantley Xeon EP and a significant number of related server platform announcements. At the same time, IDC is also seeing early stage enterprise investment in third-platform workloads that leverage Web-scale architectures typically seen in hyper-scale environments. These workloads will drive additional interest in software-defined environments that will further enhance the need for servers deployed as the infrastructure underpinning these next generation data centres."
HP held the number-one position in the worldwide server market with 25.4% factory revenue share for Q2 2014. HP's 4% revenue growth included improving demand for x86-based ProLiant servers and continued weakness in Itanium-based Integrity server revenue.
IBM held the number-two spot with 23.6% share for the quarter as factory revenue decreased 10.2% compared to Q2 2013. Demand for IBM's Power-based systems declined sharply, year on year, in advance of a significant technology refresh.
Dell maintained the third position with 16.6% factory revenue market share in Q2 2014 as factory revenue declined 6.5% compared to Q2 2013 as Dell worked to re-align its PowerEdge server business with its solutions-selling strategy.
Oracle and Cisco ended the quarter with 5.9% and 5.8%, respectively. Cisco's Q2 2014 factory revenue increased 35.4% compared to Q2 2013, gaining 1.4 points of market share. Oracle's factory revenue was up 3.9% year on year in Q2 2014.