Welcome!

News Feed Item

Worldwide Server Market Revenues Decreased -2.2% in First Quarter as Volume Server Demand Improves, According to IDC

According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market decreased -2.2% year over year to $10.9 billion in the first quarter of 2014 (1Q14). This is the fifth consecutive quarter that the server market has experienced a year-over-year decline in worldwide revenue. Server unit shipments improved 2.1% year over year in 1Q14 to 2.1 million units as investments in hyperscale datacenter capacity were largely offset by consolidation, which continued to be a strategic focus for many large and small customers around the globe.

On a year-over-year basis, volume systems experienced 3.9% revenue growth. This was the fourth consecutive quarter that volume system demand increased year over year. At the same time, demand for midrange and high-end systems experienced year-over-year revenue declines of -4.8% and -25.6% respectively in 1Q14. The midrange and high-end markets were impacted by difficult year-over-year comparisons combined with transitions in the technology refresh cycles typical for these segments.

"The server market continues to be heavily influenced by the emergence of the 3rd Platform as mobile, cloud, big data, and social enablement drive significant hyperscale server deployments globally," said Matt Eastwood, Group Vice President and General Manager, Enterprise Platforms at IDC. "At the same time, traditional client-server workloads continue to drive investment in private cloud facilitation as traditional SMB and enterprise customers drive consolidation and automation deeper into their environments. The net effect is an increasing concentration of computing power into fewer and larger enterprise and service provider datacenters around the world."

Overall Server Market Standings, by Vendor

HP held the number 1 position in the worldwide server market with 26.5% factory revenue share for 1Q14. HP's -2.0% revenue decline included stable demand for x86-based ProLiant servers and continued weakness in Itanium-based Integrity server revenue. IBM held the number 2 spot with 19.1% share for the quarter as factory revenue decreased -25.4% compared to 1Q13. Demand for IBM's x86-based System x servers and System z mainframes declined sharply year over year. Dell maintained the third position with 18.0% factory revenue market share in 1Q14 as factory revenue declined -3.2% compared to 1Q13. Cisco, Fujitsu, and Oracle ended the quarter in a three-way statistical tie* for the number 4 position with 5.7%, 5.0%, and 4.9% factory revenue share respectively. Cisco's 1Q14 factory revenue increased 37.0% compared to 1Q13, gaining 1.6 points of market share, and Oracle's factory revenue was up 1.9% year over year in 1Q14.

Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, First Quarter of 2014

(Revenues are in Millions)

                             
Vendor 1Q14 Revenue

1Q14 Market
Share

1Q13 Revenue

1Q13 Market
Share

1Q14/1Q13
Revenue
Growth

1. HP $2,889 26.5% $2,947 26.5% -2.0%
2. IBM $2,084 19.1% $2,793 25.1% -25.4%
3. Dell $1,963 18.0% $2,028 18.2% -3.2%
4. Cisco* $617 5.7% $450 4.0% 37.0%
4. Fujitsu* $549 5.0% $562 5.0% -2.3%
4. Oracle* $538 4.9% $528 4.7% 1.9%
ODM Direct $799 7.3% $455 4.1% 75.4%
Others $1,456 13.4% $1,377 12.4% 5.8%
All Vendors $10,895 100% $11,140 100% -2.2%
 

Source: IDC's Worldwide Quarterly Server Tracker, May 2014

* Note: IDC declares a statistical tie in the worldwide server market when there is less than one percent difference in the revenue share of two or more vendors.

In addition to the table above, an interactive graphic showing worldwide server shipments over the previous five quarters is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

Top Server Market Findings

  • Demand for x86 servers improved in 1Q14 with revenues increasing 4.9% year over year in the quarter to $8.9 billion worldwide as unit shipments increased 2.5% to 2.1 million servers. HP led the market with 29.6% revenue share based on 0.4% revenue growth over 1Q13. Dell retained second place, securing 22.0% revenue share.
  • Non x86 servers experienced a revenue decline of -25.2% year over year to $2.0 billion representing 17.9% of quarterly server revenue. This was the eleventh consecutive quarter of revenue decline in the non-x86 server segment. IBM leads the segment with 57.2% revenue share following a year-over-year revenue decline of -31.0% when compared with the first quarter of 2013.
  • Blade servers, which are highly leveraged in enterprise's virtualized environments, increased 2.3% year over year to $2.0 billion. Blades now account for 18.0% of total server revenue. HP maintained the number 1 spot in the blade server market in 1Q13 with 43.7% revenue share; Cisco held the second position in the blade market with 24.4% revenue share; and IBM held the third position with 12.3% revenue share.
  • Density Optimized servers, utilized by large heterogeneous datacenters, experienced weaker demand in 1Q14. Revenue declined -10.8% year over year in 1Q14 to $649 million as unit shipments decreased -6.0% to 215,567 servers. Density Optimized servers now represent 6.0% of all server revenue and 10.4% of all server shipments.

"Market observers should not be fooled by the decline in density optimized server revenue this quarter," said Kuba Stolarski, Research Manager, Servers at IDC. "This quarter's decline in density optimized sales is indicative of temporarily lower demand from one or two very large customers who utilize density optimized servers for particular workloads. The demand should return shortly, at which point density optimized servers will return to growth. Furthermore, the decline in density should not be misinterpreted as an indicator of overall cloud Hyperscale server demand. Although dense form factors are used extensively in large cloud Hyperscale environments, many of the largest cloud service providers continue to favor rack-optimized servers in their datacenters."

IDC's Server Taxonomy

IDC's Server Taxonomy maps the eleven price bands within the server market into three price ranges: volume servers, midrange servers and high-end servers. The revenue data presented in this release is stated as factory revenue for a server system. IDC presents data in factory revenue to determine market share position. Factory revenue represents those dollars recognized by multi-user system and server vendors for ISS and upgrade units sold through direct and indirect channels and includes the following embedded server components: Frame or cabinet and all cables, processors, memory, communications boards, operating system software, other bundled software and initial internal and external disk shipments.

IDC's Worldwide Quarterly Server Tracker is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly shipments (both ISS and upgrades) and revenues (both customer and factory), segmented by vendor, family, model, region, operating system, price band, CPU type, and architecture. For more information, please contact Lidice Fernandez at 305-351-3051 or [email protected].

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. In 2014, IDC celebrates its 50th anniversary of providing strategic insights to help clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of their respective holders.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., will focus on real world deployments of DDoS mitigation strategies in every layer of the network. He will give an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He will also outline what we have found in our experience managing and running thousands of Linux and Unix managed service platforms and what specifically c...
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
Many private cloud projects were built to deliver self-service access to development and test resources. While those clouds delivered faster access to resources, they lacked visibility, control and security needed for production deployments. In their session at 18th Cloud Expo, Steve Anderson, Product Manager at BMC Software, and Rick Lefort, Principal Technical Marketing Consultant at BMC Software, will discuss how a cloud designed for production operations not only helps accelerate developer...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
A critical component of any IoT project is the back-end systems that capture data from remote IoT devices and structure it in a way to answer useful questions. Traditional data warehouse and analytical systems are mature technologies that can be used to handle large data sets, but they are not well suited to many IoT-scale products and the need for real-time insights. At Fuze, we have developed a backend platform as part of our mobility-oriented cloud service that uses Big Data-based approache...
Peak 10, Inc., has announced the implementation of IT service management, a business process alignment initiative based on the widely adopted Information Technology Infrastructure Library (ITIL) framework. The implementation of IT service management enhances Peak 10’s current service-minded approach to IT delivery by propelling the company to deliver higher levels of personalized and prompt service. The majority of Peak 10’s operations employees have been trained and certified in the ITIL frame...
trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vice president of product management, IoT solutions at GlobalSign, will teach IoT developers how t...
As the rapid adoption of containers continues, companies are finding that they lack the operational tools to understand the behavior of applications deployed in these containers, and how to identify issues in their application infrastructure. For example, how are multiple containers within an application impacting each other’s performance? If an application’s service is degraded, which container is to blame? In the case of an application outage, what was the root cause of the outage?
Digital payments using wearable devices such as smart watches, fitness trackers, and payment wristbands are an increasing area of focus for industry participants, and consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market. Wearable payment systems may utilize near field communication (NFC), radio frequency identification (RFID), or quick response (QR) codes and barcodes...
SYS-CON Events announced today that CollabNet (www.collabnet.com) a global leader in enterprise software development and delivery solutions that help customers create high-quality applications at speed, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The CEO of CollabNet Flint Brenton will also present about DevOps challenges in today’s global, open, and heterogeneous world of software development.
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
Much of the value of DevOps comes from a (renewed) focus on measurement, sharing, and continuous feedback loops. In increasingly complex DevOps workflows and environments, and especially in larger, regulated, or more crystallized organizations, these core concepts become even more critical. In his session at @DevOpsSummit at 18th Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, will show how, by focusing on 'metrics that matter,' you can provide objective, transparent, and meaningfu...