Welcome!

News Feed Item

Worldwide Server Market Revenues Increase 2.5% in Second Quarter as Infrastructure Refresh Cycle Continues, According to IDC

According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market increased 2.5% year over year to $12.6 billion in the second quarter of 2014 (2Q14). Server unit shipments improved 1.2% year over year in 2Q14 to 2.2 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. Additionally, IDC continues to see signs of a server refresh cycle that is expected to lift the market going forward.

On a year-over-year basis, volume systems experienced 4.9% revenue growth. This was the fifth consecutive quarter that volume system demand increased year over year. Midrange systems also experienced growth of 11.6% year over year as technology refresh cycles began to positively impact the segment. Meanwhile, high-end enterprise systems experienced a year-over-year revenue decline of -9.8% primarily due to difficult annual comparisons in the segment.

"The server market is experiencing the beginning of a cyclical refresh cycle as systems deployed shortly after the financial crisis are retired and replaced. IDC expects this refresh cycle will continue well into 2015 and be further accelerated by Microsoft's announcement that it is ending support for Windows Server 2003 coupled with Intel's forthcoming release of the Grantley Xeon EP and a significant number of related server platform announcements," said Matt Eastwood, Group Vice President and General Manager, Enterprise Platforms at IDC. "At the same time, IDC is also seeing early stage enterprise investment in 3rd Platform workloads that leverage Webscale architectures typically seen in hyperscale environments. These workloads will drive additional interest in software-defined environments that will further enhance the need for servers deployed as the infrastructure underpinning these next generation datacenters."

Overall Server Market Standings, by Vendor

HP held the number 1 position in the worldwide server market with 25.4% factory revenue share for 2Q14. HP's 4.0% revenue growth included improving demand for x86-based ProLiant servers and continued weakness in Itanium-based Integrity server revenue. IBM held the number 2 spot with 23.6% share for the quarter as factory revenue decreased -10.2% compared to 2Q13. Demand for IBM's Power -based systems declined sharply year over year in advance of a significant technology refresh. Dell maintained the third position with 16.6% factory revenue market share in 2Q14 as factory revenue declined -6.5% compared to 2Q13 as Dell works to re-align its PowerEdge server business with its solutions selling strategy. Oracle and Cisco ended the quarter in a two-way statistical tie* for the number 4 position with 5.9% and 5.8% factory revenue share, respectively. Cisco's 2Q14 factory revenue increased 35.4% compared to 2Q13, gaining 1.4 points of market share. Oracle's factory revenue was up 3.9% year over year in 2Q14.

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

(Revenues are in Millions)

Vendor       2Q14 Revenue       2Q14 Market Share       2Q13 Revenue       2Q13 Market Share       2Q14/2Q13 Revenue Growth
1. HP       $3,194       25.4%       $3,071       25.0%       4.0%
2. IBM       $2,972       23.6%       $3,311       27.0%       -10.2%
3. Dell       $2,083       16.6%       $2,227       18.2%       -6.5%
4. Oracle*       $737       5.9%       $709       5.8%       3.9%
4. Cisco*       $727       5.8%       $537       4.4%       35.4%
ODM Direct       $835       6.6%       $669       5.5%       24.7%
Others       $2,021       16.1%       $1,736       14.2%       16.4%
Total       $12,570       100%       $12,261       100%       2.5%

Source: IDC Worldwide Quarterly Server Tracker, August 26, 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 market share (based on factory revenue) for the top 5 server vendors for 2Q14 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 2Q14 with revenues increasing 7.8% year over year in the quarter to $9.8 billion worldwide as unit shipments increased 1.5% to 2.2 million servers. HP led the market with 29.6% revenue share based on 7.4% revenue growth over 2Q13. Dell retained second place, securing 21.2% revenue share.
  • Non-x86 servers experienced a revenue decline of -12.8% year over year to $2.7 billion, representing 21.8% of quarterly server revenue. This was the twelfth consecutive quarter of revenue decline in the non-x86 server segment. IBM leads the segment with 69.1% revenue share following a year-over-year revenue decrease of -13.9% when compared with the second quarter of 2013.
  • Blade servers, which are highly leveraged in enterprises' virtualized and converged environments, increased 7.0% year over year to $2.1 billion. Blades now account for 17.0% of total server revenue. HP maintained the number 1 spot in the blade server market in 2Q14 with 42.2% revenue share; Cisco and IBM held the second and third positions in the blade market with 25.2% and 13.7% revenue share, respectively.
  • Density-optimized servers, utilized by large homogeneous datacenters, experienced a difficult year-over-year comparison due to several large deployments that occurred in the second quarter of 2013. Revenue declined -7.6% year over year to $768 million as unit shipments decreased
    -16.1% to 216,314 servers. Density-optimized servers represent 6.1% of all server revenue and 9.7% of all server shipments.
  • Regionally, Asia/Pacific (excluding Japan) and Western Europe experienced the sharpest growth with year-over-year revenue increases of 6.9% and 6.0%, respectively. China continued to exhibit significant growth with year-over-year revenue up 19.4% to $1.8 billion. The top 4 Chinese OEMs -- Inspur, Huawei, Lenovo, and Sugon -- all grew revenue on a year-over-year basis by more than 35%.

"Modular servers – blades and density-optimized – represent distinct segments of growth for vendors in an otherwise mature market," said Jed Scaramella, Research Director, Enterprise Servers and Datacenter at IDC. "As the building block for integrated systems, blade servers will continue to drive enterprise customers along the evolutionary path toward private clouds. On the opposite side of the spectrum, density-optimized servers are being rapidly adopted by hyperscale datacenters that favor the scalability and efficiency of the form factor."

"Demand for servers in the public cloud continues to be a major driving force for server market growth," said Kuba Stolarski, Research Manager, Enterprise Servers at IDC. "While many of the largest of these companies have already undergone periodic datacenter expansions over the past year, public cloud demand for new servers will continue to outpace the general market in the immediate future. As these customers search for new ways to maximize datacenter efficiency, their technological choices may help accelerate emerging trends in low power and alternative server architectures."

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 vendor revenue for a server system. IDC presents data in vendor revenue to determine market share position. Vendor revenue represents those dollars recognized by multi-user system and server vendors for initial server shipments and upgrades 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 Hoang Nguyen at 508-935-4718 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. Follow IDC on Twitter at @IDC.

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
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...
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
Redis is not only the fastest database, but it has become the most popular among the new wave of applications running in containers. Redis speeds up just about every data interaction between your users or operational systems. In his session at 18th Cloud Expo, Dave Nielsen, Developer Relations at Redis Labs, will shares the functions and data structures used to solve everyday use cases that are driving Redis' popularity.
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...
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, will discuss how leveraging the Industrial Interne...
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
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...
Struggling to keep up with increasing application demand? Learn how Platform as a Service (PaaS) can streamline application development processes and make resource management easy.
Up until last year, enterprises that were looking into cloud services usually undertook a long-term pilot with one of the large cloud providers, running test and dev workloads in the cloud. With cloud’s transition to mainstream adoption in 2015, and with enterprises migrating more and more workloads into the cloud and in between public and private environments, the single-provider approach must be revisited. In his session at 18th Cloud Expo, Yoav Mor, multi-cloud solution evangelist at Cloudy...
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...
The demand for organizations to expand their infrastructure to multiple IT environments like the cloud, on-premise, mobile, bring your own device (BYOD) and the Internet of Things (IoT) continues to grow. As this hybrid infrastructure increases, the challenge to monitor the security of these systems increases in volume and complexity. In his session at 18th Cloud Expo, Stephen Coty, Chief Security Evangelist at Alert Logic, will show how properly configured and managed security architecture can...
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...
Unless you don’t use the internet, don’t live in California, or haven’t been paying attention to the recent news… you should be aware that self-driving cars are on their way to becoming a reality. I have seen them – they are real. If you believe in the future reality of self-driving cars, then continue reading on. If you don’t believe in the future possibilities, then I am not sure what to do to convince you other than discuss the very real changes that will roll out with the consumer producti...
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...