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June 7, 2017updated 22 Jul 2022 4:59am

Server revenues decline despite hyperscale data centre growth

Virtualisation and cloud alternatives eat into the enterprise and SMB markets.

By James Nunns

Worldwide server shipments dropped 4.2% in Q1 with revenue falling by 4.5.%.

That’s according to the latest figures from Gartner which found that although hyperscale data centre segment sales have increased, the enterprise SMB segments have seen sales drop due to more moving to the cloud.

The 4.5% revenue decline equates to $12.5bn, hardly small change.

Jeffrey Hewitt, Research Vice President at Gartner. Jeffrey Hewitt, Research Vice President at Gartner, said: “Although purchases in the hyperscale data centre segment have been increasing, the enterprise and SMB segments remain constrained as end users in these segments accommodate their increased application requirements through virtualisation and consider Cloud alternatives.”

Although the market seems to be declining, HPE can take some pride in coming out on top for server sales. However, while it still leads with a 24.1% share of the market this is down from 25.2% last year and revenue declined by 8.7% to $3bn.

The only supplier with growth was Dell EMC with a 4.8% rise that gives it a 19% share of the market which is worth $2.37bn for the quarter.

IBM suffered the most from falling sales with revenue down 34.2% to $832m, but Lenovo fell 16% to $731m and Cisco dropped 2.9% to $825m.

Read more: HPE introduces silicon-based security to Gen 10 ProLiant servers

Although the market as a whole declined, the “others” segment, which is made up of sever contract manufacturers and other market players, saw 4.4% growth to $4.73bn.

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HPE may have claimed the top spot based on revenue but Dell EMC took the top spot for serve shipments. The company took 17.9% of the market share, with a slight increase on 0.5%, while HPE saw a decline of 16.7% but still claimed second spot with 16.8% of the market.

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