The server market is on track to surge $10 billion higher in 2018 before growth rates taper, according to a new report from Dell'Oro Group. Vendor landscape is trending to lower-cost white box cloud servers.
“Although we forecast a five-year compounded annual growth rate of only two percent, the growth of the server market in 2018 will be at an unprecedented level,” said Baron Fung, Senior Business Analysis Manager at Dell’Oro Group. “However, the cloud segment, which consists of a high proportion of lower-cost custom designed servers, will continue to gain unit share over the Enterprise, putting long-term revenue growth under pressure. Furthermore, the vendor landscape will continue to shift from OEM to white box Servers as the market is shifting towards the cloud,” added Fung.
Additional highlights from the Server 5-Year Forecast Report:
- The 2018 growth is primarily attributed to rising average selling prices, resulting from vendors passing on higher commodity prices and end-users purchasing higher-end server configurations.
- We estimate half of all servers shipping this year go to the cloud, and foresee this share growing to two-thirds by 2022.
