Vendor revenue in the worldwide server market decreased 3.6% year over year to $12.4 billion in the first quarter of 2016 (1Q16), according to IDC's freshly updated Worldwide Server Tracker. The research firm attributed the decline to a pause in hyperscale server deployments as well as a clear end to the enterprise refresh cycle. IDC said worldwide server shipments decreased 3.0% to 2.2 million units in 1Q16 when compared with the same year-ago period.
"As expected, server growth slowed in the first quarter, with a clear end to the Intel-led enterprise refresh, a pause in hyperscale cloud expansion, and a very difficult year-on-year comparison in the high end of the market, coming off of a major mainframe refresh from IBM one year ago," said Kuba Stolarski, Research Director, Computing Platforms at IDC. "Now that the cyclical refresh has comes to an end, the market focus is shifting towards software-defined infrastructure, hybrid environment management, and next-gen IT domains such as the Internet of Things (IoT), robotics, and cognitive analytics. In the short term, IDC expects the second half of 2016 to re-energize hyperscale cloud infrastructure expansion with existing data centers filling out and new cloud data centers standing up across the globe."
Some highlights:
- On a year-over-year basis, volume system revenue increased 1.8% and midrange system demand increased 8.3% in 1Q16 to $9.8 billion and $1.1 billion, respectively.
- Midrange systems were helped by enterprise investment in scalable systems for virtualization and consolidation, as well as increases in x86-based mission critical systems.
- 1Q16 demand for high-end systems experienced a year-over-year revenue decline of 33.4% to $1.4 billion on a difficult compare to the prior year, in which a major IBM system z upgrade drove a spike in mainframe system refresh.
- Demand for x86 servers improved in 1Q16 with revenues increasing 2.6% year over year in the quarter to $10.6 billion worldwide while unit shipments declined 2.9% to 2.2 million servers. HPE led the market with 29.7% revenue share based on 5.5% revenue growth over 1Q15. Dell retained second place, securing 21.5% revenue share following a 1.8% year-over-year revenue decline.
- Non-x86 servers experienced a revenue decline of 28.7% year over year to $1.8 billion, representing 14.7% of quarterly server revenue. IBM leads the segment with 62.7% revenue share despite a 32.9% revenue decline when compared with the first quarter of 2015. IDC also continued to track falling revenue from ARM server sales in 1Q16, with the HP Moonshot system deployments representing the largest single component.
http://www.idc.com
