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December 5, 2013

Global server revenue drops 3.7% in Q3

The server shipments reached 2.3 million units across the globe.

By CBR Staff Writer

Server revenue during the third quarter decreased 3.7% to $12.1bn, compared to the same quarter of 2012, according to a report from International Data Corporation (IDC).

According to the report, the quarter represented the third consecutive quarter of year-over-year revenue decline due to weak demand though it added that demand is expected to increase in early 2014.

The server shipments reached 2.3 million units across the globe over the period, a slight increase compared to the same period theprevious year.

The volume systems segment grew 3.5%, while the mid-range and high-end systems experienced year-over-year revenue drops of 17.8% and 22.5% respectively during the quarter.

IDC Enterprise Platforms group VP Matt Eastwood said worldwide server revenue declined in all major geographic regions including the Americas, EMEA, and Asia/Pacific.

"The market was impacted by a steady transition from the second platform to third platform workload demand coupled with particularly weak sales of Unix servers, which served to further dampen the market," Eastwood said.

"Second platform workloads continue to represent a healthy consolidation opportunity across the market, driving solid demand for integrated systems."

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"At the same time, third platform applications are shifting more and more server demand into cloud service provider datacentres, which is opening up new market opportunity for both ODMs and Chinese OEMs."

HP topped the list of server vendors during the quarter with a server revenue share of 28.1%, followed by IBM with 23.4% factory revenue following 19.4% loss in factory revenue, mainly due to the weak demand for System x and Power Systems.

Third place was occupied by Dell with a 16.2% factory revenue market share that decreased from the corresponding period of 2012, while Cisco and Oracle held 5% and 4.1% factory revenue shares respectively.

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