Skip to main content

Worldwide Server Market Revenue Recap for 4Q17

Cloud service providers continue to drive computing server investment. Meanwhile, vendor revenue in the worldwide server market increased 26.4 percent year-over-year to $20.7 billion in the fourth quarter of 2017 (4Q17), according to the latest market study by International Data Corporation (IDC).

The server market continues to gain momentum, as traction for newer Purley- and EPYC-based offerings grows. While demand from cloud service providers has propped up overall market performance, other areas of the server market continue to show growth now as well.

Global Server Market Development

According to the IDC assessment, worldwide server shipments increased 10.8 percent year-over-year to 2.84 million units in 4Q17.

Volume server revenue increased by 21.9 percent to $15.8 billion, while midrange server revenue grew 48.5 percent to $1.9 billion.

High-end systems grew 41.1 percent to $2.9 billion, driven by IBM's z14 launch in the last quarter of 2017. However, IDC expects continued long-term secular declines in high-end system revenue, with short periods of growth related to major platform refreshes.

"Hyperscalers remained a central driver of volume demand in the fourth quarter with leaders such as Amazon, Facebook, and Google continuing their data center expansions and updates," said Sanjay Medvitz, senior research analyst at IDC.

ODMs continue to be the primary beneficiaries from hyperscale server demand. Some OEMs are also finding growth in this area, but the competitive dynamic of this market has also driven many OEMs such as HPE to focus on the enterprise.

Two key points to consider regarding new growth: IBM captured the third market position at 13 percent share with revenue growing 50.3 percent year-over-year to $2.7 billion. The ODM Direct group of vendors grew revenue by 48.1 percent to $4.2 billion.

Outlook for Geographic Growth Trends

On a geographic basis, Canada was the fastest growing region in 4Q17 with 69.7 percent year-over-year growth. The United States grew 29.6 percent, Europe, the Middle East and Africa (EMEA) grew 17.4 percent, and Latin America declined 5 percent.

Asia-Pacific (excluding Japan and China) grew 38.2 percent, China grew 33.8 percent, and Japan grew 4.3 percent. The outlook for market growth in 2018 is equally encouraging.

That being said, there's another key trend that's noteworthy. Demand for x86 servers increased 24.7 percent in 4Q17 with $17.5 billion in revenues. However, non-x86 servers also grew by 36.4 percent year-over-year to $3.2 billion.

Popular posts from this blog

How AI Reshapes a $360 Billion Foundry Market

Few technology sectors sit as close to the center of gravity in today's artificial intelligence (AI) economy as semiconductor manufacturing. Every AI chip that trains a frontier model, every GPU that powers a data center inference workload, and every power management IC that keeps hyperscaler facilities running traces its origins back to the global Foundry ecosystem. IDC's latest market study throws that reality into sharp relief, projecting that the broadly defined Foundry 2.0 market will surpass $360 billion in 2026, a 17 percent year-over-year gain that would have seemed optimistic even two years ago. For anyone advising boards or investment committees on technology and AI infrastructure strategy, this growth trajectory demands careful consideration. Foundry 2.0 Market Development The umbrella term covers four distinct verticals: pure-play foundry, non-memory integrated device manufacturer (IDM) production, outsourced semiconductor assembly and test (OSAT), and photomask fab...