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  1. Hardware
March 2, 2017

HPE remains top vendor as global server market declines

IDC said global server market revenue declined 4.6% in Q4 amid continued softened enterprise demand.

By CBR Staff Writer

HPE has retained the number one spot in the global server market with 23.6% market share in vendor revenue for the fourth quarter of 2016, despite revenue decreasing 12.2% to $3.5bn.

IDC said server market revenue fell 4.6% year over year to $14.6bn in Q4 due to a slowdown in hyperscale datacentre growth and a drop in high-end server sales.

Server shipments decreased 3.5% to 2.55 million units, while volume server revenue decreased 3.3% to $11.2bn. Midrange server revenue fell 6.1% to $1.4bn, with high-end systems revenue also seeing a decline of 10.7% to $2bn.

IDC expects continued long-term secular declines in high-end system revenue.

IDC computing platforms research director Kuba Stolarski said the server market suffered another difficult quarter as most segments declined, including hyperscale deployments, suggesting that the weakness previously seen is more systemic.

“Some public cloud datacentre deployments are being delayed and there are indications that overall levels of deployment and refresh may slow down even through the long term as hyperscalers continue to evaluate their hardware provisioning criteria.”

Stolarski noted that enterprises are struggling to decide whether to deploy workloads on premises or off, and continue to consolidate existing workloads on fewer servers.

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Dell Technologies stood at second place with 17.6% of vendor revenue for Q4, while revenue increased 0.1% year over year to $2.6bn.

IBM regained its third spot, controlling 12.3% of the market even while vendor revenue declined 17.1% year over year.

server market decline

Lenovo and Cisco had 6.5%, and 6.3% revenue share, respectively. There was a 16.7% decline in Lenovo’s revenue, which stood at $947m, while Cisco’s revenue declined 1.3% to $916m.

IDC said demand for x86 servers weakened in Q4 with revenues decreasing 1.9% year over year in the quarter to $12.2bn globally, while unit shipments decreased 3.3% to 2.53 million servers.

x86 average selling prices (ASPs) increased by 1.5% year over year and 2.4% sequentially.

HPE led the x86 server market with 26.5% revenue share, though it posted 13% drop in x86 revenue.

Dell Technologies secured 21.1% revenue share after a 0.1% year-over-year revenue increase. Dell Technologies has 21% share in x86 servers, while HPE has 20.5%.

Non-x86 servers had a revenue decline of 16.7% year over year to $2.4bn, representing 16.2% of quarterly server revenue.

The segment was led by IBM with 75.4% revenue share despite a 17.1% year-over-year revenue decline.

IDC said it continued to track minimal revenue from ARM-based server sales in Q4 and the company’s sales are yet to make an impact on the server market.

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