Server revenue down; HP, IBM tied at #1

Thursday 30 August 2012


Global server market decreased 4.8 per cent year over year to $12.6 billion in the second quarter of 2012 (2Q12), finds International Data Corporation (IDC) in its  Worldwide Quarterly Server Tracker, factory revenue report.

This is the third consecutive quarter of year-over-year revenue decline, as server market demand continued to soften following a strong refresh cycle which characterized the market in most of 2010 and 2011.

Server unit shipments decreased 3.6 per cent year-over-year in 2Q12 to 2.0 million units.

This was the first year-over-year decline in server shipments since 3Q09, a period of almost three years.

On a year-over-year basis, volume systems experienced a 2.5 per cent revenue decline. At the same time, demand for midrange and high-end systems experienced year-over-year revenue declines of 11.2 per cent and 7.6 per cent respectively in 2Q12.

All three segments were impacted by difficult year-over-year compares combined with transitions in the technology refresh cycles.

"Worldwide server revenue declined for the third consecutive quarter in 2Q12 as the market continued working its way through a number of technology transitions impacting customer demand for x86, Unix, and mainframe class systems. That said, it is also clear that economic uncertainty is weighing on the market and the sales cycle is lengthening," said Matt Eastwood, group vice president and general manager, Enterprise Platforms at IDC.

"Regionally, server demand in Western Europe and Japan was particularly soft while server revenue in the US and Asia/Pacific managed to grow modestly. It is important to note that IDC believes that server demand will begin to improve in the second half of 2012 following a number of critical product refreshes which continue to be announced," he added.

Overall Server Market Standings, by Vendor


HP and IBM jointly held the number 1 position in the worldwide server market with 29.6 per cent and 29.2 per cent factory revenue share respectively for 2Q12, a statistical tie.

IBM experienced a 8.2 per cent year-over-year decline in factory revenue losing 1.1 points of share in the quarter on soft demand for System x, Power Systems, and System z ahead of a number of major product transitions.

HP's factory revenue declined 5.0 per cent year-over-year in 2Q12 based on flat sales for x86-based ProLiant servers offset by continued declines in HP Integrity server demand. Dell maintained third place with 16.0 per cent factory revenue market share in 2Q12. Dell's factory revenue increased 5.9 per cent compared to 2Q11 helping Dell to its highest-ever server market share in any quarter.

Oracle maintained the number 4 position with 6.0 per cent factory revenue share; Oracle's 2Q12 factory revenue decreased 20.1 per cent compared to 2Q11.

Fujitsu ended the quarter in the number 5 market position with 3.9 per cent factory revenue share. Facing a tough yearly compare from the K-computer HPC deal in 2Q11, Fujitsu server revenue declined 42.1 per cent year-over-year.

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