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
Both SaaS vendors and SaaS buyers are going “all-in” to hyperscale IaaS platforms such as AWS, which is disrupting the SaaS value proposition. Why should the enterprise SaaS consumer pay for the SaaS service if their data is resident in adjacent AWS S3 buckets? If both SaaS sellers and buyers are using the same cloud tools, automation and pay-per-transaction model offered by IaaS platforms, then why not host the “shrink-wrapped” software in the customers’ cloud? Further, serverless computing, cl...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, discussed some of the security challenges of the IoT infrastructure and related how these aspects impact Smart Living. The material was delivered interac...
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities. In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, posited that disruption is inevitable for comp...
It is ironic, but perhaps not unexpected, that many organizations who want the benefits of using an Agile approach to deliver software use a waterfall approach to adopting Agile practices: they form plans, they set milestones, and they measure progress by how many teams they have engaged. Old habits die hard, but like most waterfall software projects, most waterfall-style Agile adoption efforts fail to produce the results desired. The problem is that to get the results they want, they have to ch...
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
"We are a monitoring company. We work with Salesforce, BBC, and quite a few other big logos. We basically provide monitoring for them, structure for their cloud services and we fit into the DevOps world" explained David Gildeh, Co-founder and CEO of Outlyer, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
In 2014, Amazon announced a new form of compute called Lambda. We didn't know it at the time, but this represented a fundamental shift in what we expect from cloud computing. Now, all of the major cloud computing vendors want to take part in this disruptive technology. In his session at 20th Cloud Expo, Doug Vanderweide, an instructor at Linux Academy, discussed why major players like AWS, Microsoft Azure, IBM Bluemix, and Google Cloud Platform are all trying to sidestep VMs and containers wit...
While DevOps most critically and famously fosters collaboration, communication, and integration through cultural change, culture is more of an output than an input. In order to actively drive cultural evolution, organizations must make substantial organizational and process changes, and adopt new technologies, to encourage a DevOps culture. Moderated by Andi Mann, panelists discussed how to balance these three pillars of DevOps, where to focus attention (and resources), where organizations might...
"When we talk about cloud without compromise what we're talking about is that when people think about 'I need the flexibility of the cloud' - it's the ability to create applications and run them in a cloud environment that's far more flexible,” explained Matthew Finnie, CTO of Interoute, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
The Internet giants are fully embracing AI. All the services they offer to their customers are aimed at drawing a map of the world with the data they get. The AIs from these companies are used to build disruptive approaches that cannot be used by established enterprises, which are threatened by these disruptions. However, most leaders underestimate the effect this will have on their businesses. In his session at 21st Cloud Expo, Rene Buest, Director Market Research & Technology Evangelism at Ara...
No hype cycles or predictions of zillions of things here. IoT is big. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, Associate Partner at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He discussed the evaluation of communication standards and IoT messaging protocols, data analytics considerations, edge-to-cloud tec...
When growing capacity and power in the data center, the architectural trade-offs between server scale-up vs. scale-out continue to be debated. Both approaches are valid: scale-out adds multiple, smaller servers running in a distributed computing model, while scale-up adds fewer, more powerful servers that are capable of running larger workloads. It’s worth noting that there are additional, unique advantages that scale-up architectures offer. One big advantage is large memory and compute capacity...
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists examined how DevOps helps to meet the de...