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June 4, 2012

Worldwide server market revenue declines by 2.4% in Q1: IDC

HP occupied the top position in the worldwide server market with 29.3% factory revenue share followed by IBM with 27.3% share

By CBR Staff Writer

Global server market revenue was down by 2.4% to $11.8bn in the first quarter of 2012 (1Q12), marking the second consecutive quarter of year-over-year revenue decline, according to the International Data Corporation (IDC).

However, server unit shipments grew 2.7% year over year in Q1 of 2012 to 2 million units, the second highest quarterly total ever reported in the first calendar quarter of any year, the research firm noted.

Volume systems had 2.1% revenue growth, the ninth time in the previous ten quarters that volume system demand improved year over year and the demand for midrange and high-end systems experienced revenue declines of 11.2% and 10.2%, respectively in 1Q12.

IDC Enterprise Platforms group vice president and general manager Matt Eastwood said the server market worked through a transitional period in the first quarter of 2012 as suppliers prepared to introduce numerous critically important x86 server offerings.

"At the same time, difficult year-over-year compares helped distort some results across other segments of the market," he said.

"Regionally, Americas was flat year-over-year while EMEA experienced a sharp double-digit decline in server spending."

HP held the number 1 position in the worldwide server market with 29.3% factory revenue share for followed by IBM with 27.3% share as factory revenue decreased 7.3%.

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Dell maintained the third position with 15.6% factory revenue market share and Oracle maintained the number 4 position with 6.1% factory revenue share.

Fujitsu ended the quarter in a statistical tie for the number 4 position with 5.2% factory revenue share following a 7.3% year-over-year increase in server revenue.

Linux server demand was positively impacted by high performance computing (HPC) and cloud infrastructure deployments, as hardware revenue improved 16.0% year over year in 1Q12 to $2.4bn.

Microsoft Windows server demand was up 1.3% in 1Q12 with quarterly server hardware revenue totaling $5.9bn representing 50.2% of overall quarterly factory revenue, up 1.8 points over the prior year’s quarter.

Unix servers experienced a revenue decline of 17.2% year over year to $2.2bn representing 18.3% of quarterly server revenue for the quarter.

Demand for x86 servers weakened in advance of Intel’s Xeon E5 dual-socket server processor launch in March and overall revenues increased 4.5% to $8.4bn worldwide as unit shipments increased 3.2% to 1.9 million servers.

The blade market continued its growth in the quarter with factory revenue increasing 7.3% year over year, with shipment growth increasing by 4.8% compared to 1Q11.

Overall, bladed servers, including x86, EPIC, and RISC blades, accounted for $2bn in revenues, representing 16.6% of quarterly server market revenue.

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