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

Why Healthcare and Smart City Apps Drive 5G IoT

Fifth-generation (5G) wireless technology for cellular networks is a successor to fourth-generation (4G) wireless technology. By 2023, Juniper Research anticipates that there will be over 1 billion 5G connections globally. The technology will provide the data infrastructure for the advancement of wireless communications and for new developments in the Internet of Things (IoT) -- including smart cities and healthcare. 5G IoT Market Development According to the latest worldwide market study by Juniper Research, 5G IoT connections will reach 116 million globally by 2026 -- that's increasing from just 17 million connections in 2023. Juniper analysts predict that the healthcare sector applications and government or other smart city services will drive this outstanding 1,100 percent growth over the next three years. Juniper examined 5G adoption across key industry sectors -- such as the automotive, mobile broadband, and smart homes -- and forecasts healthcare and smart cities will accoun

How Savvy Leaders Re-Imagine Work in 2023

As we look to the year ahead, there will be significant challenges and opportunities facing the Chief Human Resource Officer (CHRO) role. In order to be successful, savvy HR leaders must be prepared to take proactive steps that adapt and evolve. "HR leaders have faced an increasingly unpredictable environment amid many organizations mandating a return to office, permanently higher turnover and burnt out employees," said Emily Rose McRae, senior director at Gartner . HR Innovation Market Development One of Gartner's key predictions for 2023 is that the use of artificial intelligence (AI) and automation will continue to increase within the enlightened digital workplace. This transition will require HR leaders to develop new skills and competencies in order to effectively manage and lead teams that are increasingly relying on these enabling technologies. Additionally, HR leaders will need to ensure that their organizations are investing in the necessary infrastructure and re

Top 10 CFO Priorities Require Rethinking Finance

The Chief Financial Officer (CFO) role is essential to digital business growth. While CFOs do not get closely involved in the tactical details of the digital transformation of their functions, they still recognize its strategic importance. According to the latest survey by Gartner, CFOs are faced with the challenge of balancing the need for substantive digital business innovation with financial cost control and risk management. "CFOs will be stretched thinly across many activities in 2023. The survey revealed a wide range of actions CFOs plan to either lead or be significantly involved with," said Marko Horvat, vice president at Gartner. Survey Findings: The Top Ten Priorities Cost Optimization - Cost reduction remains the top priority for CFOs as they look for ways to cut costs and improve efficiency in their operations. This includes identifying cost-saving opportunities through automation, outsourcing, and business process improvement. Business Continuity - The global C