Vendor revenue in the worldwide server market declined 0.4% year over year to $13.4 billion in the second quarter of 2016 (2Q16), according to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker.
IDC attributed the slowing market to a pause in hyperscale datacenter expansion and the continued drag from high-end server sale declines. In addition, the robust enterprise refresh cycle of 2015 will create difficult comparisons in 2016 to the prior year’s quarterly results.
Some highlights:
- Worldwide server shipments increased 2.6% to 2.4 million units in 2Q16 when compared with the same year-ago period.
- On a year-over-year basis, volume system revenue increased 5.3% and midrange system demand increased 12.7% in 2Q16 to $10.6 billion and $1.3 billion, respectively.
- Hewlett Packard Enterprise (HPE) retained the number 1 spot in the worldwide server market with 25.4% market share in vendor revenue for 2Q16, as revenue decreased 0.3% year over year to $3.4 billion.
- HPE's year-over-year growth rate as reported by IDC was impacted by the start of the H3C partnership in China that began in May of 2016; as a result, a portion of HPE-designed servers were rebranded as H3C for the China market. Had these systems been branded as HPE servers, their worldwide server market share would have been 26.6% in vendor revenue for the quarter as revenue increased 4.2% year over year to $3.6 billion.
- Dell maintained its number 2 position in the worldwide server market, building on server revenue growth of 10.0% year over year to $2.6 billion, resulting in 19.3% vendor revenue market share in 2Q16. IBM retained the number 3 position with 9.8% share for the quarter as revenue decreased -34.0% year-over-year to $1.3 billion in 2Q16, as both POWER systems and system z mainframes experienced double-digit declines.
- Lenovo and Cisco tied for the number 4 position for the second consecutive quarter with 7.2% and 6.4% market shares, respectively. Lenovo earned $969 million in revenues following an increase of 2.1%, while Cisco's revenues declined 0.7% year over year to $860 million.
- ARM sales have yet to make an impact on the server market.
"The server market is progressing exactly as expected, with close to flat growth in the second quarter, following a difficult first quarter, but growth in volume servers is still healthy, which is a good sign for the market moving forward," said Kuba Stolarski, research director, Computing Platforms at IDC. "As we prepare for the second half of 2016, expect to see market growth led by cloud datacenter buildouts from key hyperscalers. Looking out further, the market will be impacted by digital transformation initiatives, including the Internet of Things and cognitive computing, and by a continuing shift towards software-defined infrastructure."
http://www.idc.com
