Global server market revenue declines in third quarter: report


by CBR Staff Writer| 29 November 2012

IBM topped the list followed by HP, Dell, Oracle and Fujitsu respectively

Worldwide server market declined 4% during the third quarter of 2012 to $12.2bn when compared to same period in 2012, representing the fourth consecutive quarter of revenue decline, according to a new report from IDC.

IDC's Worldwide Quarterly Server Tracker revealed that server market demand continued to diminish following a strong refresh cycle that categorised the market during 2010 and 2011.

During 3Q12, server unit shipments reported 0.6% rise to 2.1 million units over same quarter in 2011.

IDC Enterprise Platforms group vice president and general manager Matt Eastwood said the market was constrained by poor macro-economic conditions in manygeographies in combination with several technology transitions that served to further hamper the market.

"In fact, every geographic region except Asia/Pacific experienced revenue contraction in the quarter," Eastwood said.

"The growth in Asia/Pacific was largely driven by strong demand in China, which helped a China-based server vendor - Inspur - into a top 10 factory revenue position for the first time."

During the quarter, IBM topped the list of server revenues by reporting 28.7% share followed by HP with 27.3%, Dell with 17.1%, Oracle reported 4.8% and Fujitsu with 3.8% share.

IDC Enterprise Servers research manager Kuba Stolarski said the Unix server market continued to struggle ahead of year-end refresh cycles.

"IDC expects a short-term easing in the high-end market's decline as technology refreshes, including Intel's Poulson update to its Itanium line, begin to take their course," Stolarski said.

"However, mission critical applications continue to migrate to x86 platforms, placing increasing pressure on the high-end server market."

Revenue generated by the x86 servers increased 2% to $8.9bn due to 1.5% rise in its shipments to 2.1 million servers during the quarter.

Bladed server market reported 2.9% in revenue during 2Q12, while shipments declined 1.1% over the same period in 2011.

According to the research firm, about 91% of all blade revenue is driven by x86-based blades, that account for 21.5% of all x86 server revenue.

IDC Enterprise Servers research manager Jed Scaramella said modular form factors continue to gain favor with server customers.

"Many enterprises are exploring converged systems, which are built on top of blades," Scaramella said.

"These platforms present vendors with the opportunity to increase their customer share of wallet through the attached sale of storage, networking, and services."

The large cloud datacenters and service providers accounted for 22.9% of server revenue during the quarter, reporting a 3.3 points rise from the same period in 2011.

According to a similar report from Gartner, worldwide server shipments increased 3.6%, while revenue generated declined 2.8% during the third quarter of 2012.

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