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Thursday, September 03, 2015

Data Centers Use More x86-Based Hyperscale Servers

Data center technology continues to evolve, as revenue in the worldwide server market increased by 6.1 percent year-over-year to $13.5 billion in the second quarter of 2015 (2Q15), according to findings from the latest market study by International Data Corporation (IDC).

This quarter revenue grew in rack-optimized, blade, and density-optimized server form factors, while towers declined slightly. Global server shipments totaled 2.29 million units in 2Q15 -- that's an increase of 3.2 percent when compared with the second quarter of 2014.

On a year-over-year basis, volume system revenue increased 8.1 percent and high-end server system demand increased 4.0 percent in 2Q15 to $10.1 billion and $2.3 billion, respectively.

The volume segment was aided by a continued expansion of x86-based hyperscale server infrastructures coupled with enterprise and SMB refresh of x86-based platforms, while high-end systems were helped by IBM's z13 refresh.

Meanwhile, demand for mid-range systems in 2Q15 contracted by -5.4 percent year over year to $1.1 billion, as the x86 refresh appears to have run its course in this segment.

"The recent growth trend in the server market is confirmation of the larger IT investment taking place, despite dramatic change occurring in system software thanks to open source projects such as Docker and OpenStack," said Al Gillen, vice president at IDC.


Overall Server Market Vendor Results

HP captured worldwide market share of 25.4 percent in 2Q15 on 7.7 percent year-over-year revenue growth to $3.4 billion. HP's revenue growth was driven primarily by strong demand for its density-optimized servers, which grew 118.7 percent year over year, and its rack-optimized servers, which grew at a more modest 10.5 percent year over year but still managed to contribute a larger portion to HP's overall revenue growth.

Dell showed year-over-year growth of 5.9 percent and its nearly $2.4 billion of revenue placed the company in the number 2 position with 17.5 percent market share this quarter. Dell benefited from revenue growth in its blade and rack-optimized products. Dell's blade server revenue grew faster than that of any of the top 5 vendors at 38.7 percent, discounting Lenovo's acquisition of IBM's x86 server business.

IBM retained its number 3 position following its x86 divestiture with $2.0 billion in revenue and 14.8 percent market share. IBM's revenues are now associated with its POWER and System Z product lines.

Lenovo and Cisco finished the quarter in a statistical tie for the number 4 position. Lenovo captured 7.0 percent worldwide market share with $949 million in 2Q15 revenues.

Cisco was close behind with $867 million in revenue and 6.4 percent revenue market share. Cisco's year-over-year growth of 19.3 percent was considerably above average for the industry and suggests the company is not done capturing incremental market share in the server market. Cisco's blade business also continued to grow well, with Cisco's blade revenue second only to HP in 2Q15.