Skip to main content

Why Hyperscale Cloud Providers Lead the Server Market

IT Vendor revenue in the worldwide server market increased 19.9 percent year-over-year to reach $17 billion in the third quarter of 2017 (3Q17), according to the latest market study by International Data Corporation (IDC).

While demand from cloud computing service providers has driven overall market performance in the past, other areas of the server market are beginning to show growth. Worldwide server shipments increased 11.1 percent year-over-year to 2.67 million units in 3Q17.

Server Systems Market Development

Volume server revenue increased by 19.3 percent to $14.2 billion, while midrange server revenue grew 26.9 percent to $1.4 billion.

High-end systems grew 19.4 percent to $1.3 billion, benefiting from the IBM z14 launch this quarter. That said, IDC expects continued long-term secular declines in high-end system revenue, with short periods of growth related to major platform refreshes.

"Hyperscalers continued driving volume demand in the third quarter, with Amazon again leading the charge, as Google and Facebook also began ramping up their server deployments again," said Kuba Stolarski, research director at IDC.

While Original Design Manufacturers (ODMs) have largely been the beneficiaries of hyperscaler server demand, some OEMs have now begun to experience significant growth related to the enterprise segment.

Dell grew its server business by 37.9 percent, relying on the strong synergy between its server team and the storage team incorporated from the EMC acquisition. HPE has been pivoting away from hyperscaler business and focusing on the enterprise, hurting year-over-year comparisons in the short term, but showing strength in the enterprise.

China has become a strong market for enterprise growth, as evidenced by Dell growing 42.3 percent year-over-year to $433 million, and HPE/New H3C Group growing 49.6 percent to $421 million. In addition, IBM has demonstrated that the enterprise still has space for non-x86 systems, growing the newly refreshed system z business by 63.8 percent year-over-year to $673 million.

HPE/New H3C Group remained first in the worldwide server market with 19.5 percent market share in 3Q17, as revenue decreased 1.1 percent year-over-year to $3.3 billion. HPE's share and year-over-year growth rate includes revenues from the H3C joint venture in China that began in May of 2016; thus, the reported HPE/New H3C Group combines server revenue for both companies globally.

Dell maintained the second position in the worldwide server market with 18.1 percent of vendor revenue for the quarter and 37.9 percent year-over-year growth to $3.1 billion. IBM and Cisco were statistically tied for the third market position.

IBM had 6.4 percent share, with revenue growing 26.5 percent year-over-year to $1.1 billion. Cisco had 5.8 percent share, with revenue increasing 6.9 percent to $992 million.

Lenovo was ranked fifth with 5.1 percent share and revenue declining 12.6 percent to $861 million. The ODM Direct group of vendors grew revenue by 45.3 percent to $4.1 billion. HPE and Dell were in a statistical tie for first place in unit share, each with 18.8 percent.

Popular posts from this blog

Mobility-as-a-Service Creates Disruptive Travel Options

Building on significant advances in big data, analytics, and the Internet of Things (IoT), more innovative transit service offerings aim to increase public transport ridership and reduce emissions or congestion within metropolitan areas. By providing these services through smartphone apps, the transit services also significantly increase user convenience, providing information on different human mobility offerings -- including public transport, ridesharing, and autonomous vehicles. Mobility-as-a-Service Market Development According to the latest market study by Juniper Research, Mobility-as-a-Service (MaaS) subscribers will generate $53 billion in revenue for MaaS platform providers by 2027 -- that's rising from $5.3 billion in 2021. Let's start with a basic definition. MaaS is the provision of multi-modal end-to-end travel services through single platforms, by which users can determine an optimal route and price. The study identified a monthly subscription model as key to incr

Robocall Mitigation Solutions to Halt Criminal Threats

If you answer the phone and hear a recorded message instead of a live person, it's likely a robocall. A robocall is a phone call that uses a computerized autodialer to deliver a pre-recorded message. In 2020, the U.S. Federal Trade Commission (FTC) received 2.8 million consumer complaints about robocalls. Offering solutions to robocalling and associated fraudulent business practices, computerized mitigation platforms are an integral part of the solution. Platforms that are focused on actionable systems to disrupt unsolicited and potentially criminal phone calls help telecom service providers and industry regulators. Issues of whether one-size-fits-all developments are sufficient to be effective across the spectrum need to be addressed, and whether a single telecom network operator working unilaterally with a third-party platform could compromise desired or mandatory industry-wide standards. Robocall Mitigation Market Development According to the latest worldwide market study by Jun

Why a Distributed Workforce will Raise Productivity

While most senior executives at progressive organizations have already evolved their human resource policies to accommodate employee desire for flexible working models, others still resist change. Unfortunately, many of the laggards are now experiencing the "Great Resignation" phenomenon. The global pandemic required business leaders to rethink when, where, and how their knowledge workers and front-line employees perform their work. Yet even with the ongoing pandemic recovery slowly underway, some organizations are still trying to determine their workforce approach. According to the latest worldwide market study and recent survey data from International Data Corporation (IDC), stability and geography will likely define the balance of future work strategies. Distributed Workforce Market Development On a global basis, physical office sites are expected to be the dominant location for work as legacy organizations eventually find themselves in a more stable environment. However,