Worldwide Server Shipments Grew 4 Percent While Revenue Decreased 3.8 Percent in the Second Quarter of 2013: Gartner
New Delhi, India, August 30, 2013: In the second quarter 2013, worldwide server shipments grew 4 percent year-on-year, while revenue declined 3.8 percent from the second quarter of 2012, according to Gartner, Inc.
“The global server market remains in a relatively weak state overall,” said Jeffrey Hewitt, research vice president at Gartner. “The only real regional bright spot was Asia/Pacific with growth of 10 percent and 21.7 percent year on year in terms of revenue and shipments. Canada was the only other region that grew in both revenue and units (6.3 percent in revenue and 2.7 percent in units) while Latin America was close to flat for revenue but increased by 1 percent in terms of shipments. The U.S. also grew in terms of shipments by 1.9 percent year-on-year but declined in revenue by 5.1 percent.”
“x86 servers managed to produce an increase of 4.5 percent in units for the second quarter, and 2.1 percent in revenue. RISC/Itanium Unix servers continued to decline at 27.4 percent in units and 25.3 percent in vendor revenue compared to the same quarter last year. The ‘other’ CPU category, which is primarily mainframes, showed an increase of 6.9 percent in revenue,” Mr. Hewitt said.
IBM had the lead in the worldwide server market based on revenue for the second quarter of 2013, the company posted worldwide server revenue of nearly $3.2 billion for a total share of 25.6 percent. The biggest revenue contribution was from its System z.
In server shipments, HP remained the worldwide leader in the second quarter of 2013 in spite of a year-on-year shipment decline of 13.6 percent for the quarter. HP’s worldwide server shipment share was 23.9 percent representing a 4.8 percent decrease in share from the same quarter in 2012.
Inspur also made it into the top five server position in the second quarter of 2013 primarily due to a significant high-performance computing (HPC) deal that it won in its native China during the quarter.
In terms of server form factors, x86 blade servers declined by 3 percent in shipments and 4.5 percent in revenue for the quarter. The x86 rack-optimized form factor climbed 3.9 percent in shipments and 2.4 percent in revenue for the second quarter.
In Europe, the Middle East and Africa (EMEA), server shipments surpassed 550,000 units in the second quarter of 2013, a decrease of 5.9 percent from the same period last year. Server revenue totaled $3.1 billion in the quarter, a decline of 4.6 percent from the same quarter last year.
“Demand for servers in EMEA remained constrained in the second quarter,” said Adrian O’Connell, research director at Gartner. All three EMEA sub-regions saw server revenue decrease in the second quarter of 2013. In Western Europe, revenue declined 1.6 percent; in Eastern Europe it fell 17.9 percent and the Middle East and Africa region decreased 9 percent.
“This was the seventh consecutive quarter for shipment decline and the eighth consecutive quarter for revenue decline, showing an even more sustained period of weakness than the one we saw during the economic downturn that began in 2008,” said Mr. O’Connell.
In terms of vendor performances, Dell and Fujitsu remained the only two vendors from the top five to show revenue growth. The EMEA market lacks the hyperscale segment growth that other regions benefit from. This means that vendors in the region are more exposed to the global weakness in enterprise sales.
In the second quarter of 2013, x86 server revenue decreased 4.7 percent in EMEA, while RISC/Itanium UNIX revenue fell 22.6 percent. Revenue for the “other” CPU segment grew 44.3 percent. The RISC/Itanium UNIX segment continued to suffer from migrations to alternative platforms as users sought lower cost alternatives and more flexibility. The “other” CPU category, which is primarily driven by mainframes, saw a double-digit increase thanks to platform refreshes. In the second quarter of 2013, the market bifurcation continued with the RISC/Itanium UNIX segment decreasing as a proportion, while x86 servers kept extending their share.
“Weak enterprise demand, combined with consolidation and platform migration, continued to dampen the EMEA server market,” said Mr. O’Connell. ”In addition to weak demand, established vendors are increasingly challenged by relatively-new vendors such as Cisco, Asia/Pacific-based suppliers such as Lenovo and Huawei, and original design manufacturers selling directly to large end-users.
“While the server market in EMEA is weak, the underlying trends are highly dynamic. Opportunities remain for vendors who are agile enough to position themselves in the context of shifting market dynamics.”
Additional information is available to subscribers of Gartner Servers Quarterly Statistics Worldwide program. This program provides worldwide market size and share data by vendor revenue and unit shipments. Segments include: region, vendor, vendor brand, sub brand, CPU type, CPU group, Max CPU, platform, price band, operating systems and distribution channels.
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