Welcome!

@CloudExpo Authors: Pat Romanski, Jeev Trika, Liz McMillan, Elizabeth White, Dana Gardner

News Feed Item

Worldwide Server Market Revenues Decline 4.0% in Third Quarter as Market Demand Remained Soft, According to IDC

According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market decreased 4.0% year over year to $12.2 billion in the third quarter of 2012 (3Q12). This is the fourth consecutive quarter of year-over-year revenue decline, as server market demand continued to soften following a strong refresh cycle that characterized the market in most of 2010 and 2011. After declining in 2Q12, server unit shipments increased 0.6% year over year in 3Q12 to 2.1 million units. This was the 11th time in the past 12 quarters that server units have grown on a year-over-year basis.

On a year-over-year basis, volume systems experienced a 0.5% revenue decline. At the same time, demand for midrange and high-end systems experienced year-over-year revenue declines of 14.0% and 8.9% respectively in 3Q12. 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 fourth consecutive quarter in 3Q12. The market was constrained by poor macro-economic conditions in many geographies coupled with a number of technology transitions that served to further hamper the market," said Matt Eastwood, group vice president and general manager, Enterprise Platforms at IDC. "In fact, every geographic region except Asia/Pacific experienced revenue contraction in the quarter. The growth in Asia/Pacific was largely driven by strong demand in China, which helped a China-based server vendor – Inspur – into a top 10 factory revenue position for the first time."

Overall Server Market Standings, by Vendor

IBM held the number 1 position in the worldwide server market with 28.7% factory revenue share for 3Q12. IBM experienced a 7.6% year-over-year decline in factory revenue losing 1.1 points of share in the quarter on soft demand for System z ahead of a recently announced product transition. HP held the number 2 position with 27.3% factory revenue share following an 11.9% year-over-year revenue decline in 3Q12. HP continued to experience declines in HP Integrity server demand combined with relatively weak performance in their x86-based ProLiant server business. Dell maintained third place with 17.1% factory revenue market share in 3Q12. Dell's factory revenue increased 8.2% compared to 3Q11, helping Dell to its highest server market share in any quarter. Oracle maintained the number 4 position with 4.8% factory revenue share; Oracle's 3Q12 factory revenue decreased 23.1% compared to 3Q11. Fujitsu ended the quarter in the number 5 market position with 3.8% factory revenue share following a 22.2% year-over-year decline in server revenue.

Top Server Market Findings

  • Linux server demand continued to be positively impacted by high performance computing (HPC) and cloud infrastructure deployments, as hardware revenue increased 6.6% year over year to $2.6 billion in 3Q12. Linux servers now represent 21.5% of all server revenue, up 2.1 points when compared with the third quarter of 2011.
  • Microsoft Windows server hardware demand was down 0.9% year over year in 3Q12 with quarterly server hardware revenue totaling $6.2 billion representing 51.1% of overall quarterly factory revenue, up 1.6 points over the prior year's quarter. This is the second time in the past three quarters that Windows has been responsible for driving more than half of all server spending worldwide.
  • Unix servers experienced a revenue decline of 14.2% year over year to $2.1 billion representing 17.3% of quarterly server revenue for the quarter, the lowest percentage of server spending in more than 10 years. IBM's Unix server revenue increased by a modest 0.8% year over year; however IBM still managed to gain 7.9 points of Unix server market share when compared with the third quarter of 2011.
  • The market for non-x86 servers, including servers based on RISC, EPIC (Itanium-based), and CISC processors, declined 17.1% year over year to $3.3 billion in 3Q12. This is the fifth consecutive quarter in which non-x86 servers have exhibited a revenue decline. Non-x86 based systems now comprise 27.0% of the server market, the lowest percentage of server spending ever recorded by IDC.

"The Unix server market continued to struggle ahead of year-end refresh cycles," said Kuba Stolarski, research manager, Enterprise Servers at IDC. "IDC expects a short-term easing in the high-end market's decline as technology refreshes, including Intel's Poulson update to its Itanium line, begin to take their course. However, mission critical applications continue to migrate to x86 platforms, placing increasing pressure on the high-end server market."

x86 Industry Standard Server Market Dynamics

Demand for x86 servers continued to improve in 3Q12, with revenues growing 2.0% in the quarter to $8.9 billion worldwide as unit shipments were up 1.5% to 2.1 million servers. HP led the market with 32.0% revenue share based on an 8.7% revenue decline when compared to 3Q11. Dell retained second place, securing 23.4% of revenue share while gaining 1.3 points of share when compared with the third quarter of 2011. IBM rounded out the top three positions, holding 16.5% revenue share following a 4.7% year-over-year revenue decline. Overall, this was the thirteenth time in the previous fourteen quarters with a year-over-year increase in average selling prices for x86 servers as both the mix of systems and average system configurations continue to move up-market, helped in part by the increased focus leading suppliers have on converged infrastructure.

Bladed Server Market Results

The blade market continued its solid growth in the quarter with factory revenue increasing 2.9% year over year and shipment growth declining by 1.1% compared to 3Q11. Overall, bladed servers, including x86, EPIC, and RISC blades, accounted for $2.1 billion in revenues, representing 17.2% of quarterly server market revenue, a record high. More than 91% of all blade revenue is driven by x86-based blades, which now represent 21.5% of all x86 server revenue. HP maintained the number 1 spot in the server blade market in 3Q12 with 45.9% revenue share, while IBM finished with 19.0% revenue share. Cisco and Dell rounded out the top 4 with 15.0% and 8.1% factory revenue share, respectively.

"Modular form factors continue to gain favor with server customers," said Jed Scaramella, research manager, Enterprise Servers at IDC. "Many enterprises are exploring converged systems, which are built on top of blades. These platforms present vendors with the opportunity to increase their customer share of wallet through the attached sale of storage, networking, and services. On the opposite side of the spectrum, large cloud datacenters and service providers value the efficiencies and scalability of density optimized servers. Together these two form factors account for 22.9% of server revenue, gaining 3.3 points from a year ago."

Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, Third Quarter of 2012

(Revenues are in $ Millions)

                   
Vendor

3Q12
Revenue

3Q12 Market
Share

3Q11
Revenue

3Q11 Market
Share

3Q12/3Q11
Revenue
Growth

1. IBM $3,502 28.7% $3,789 29.8% -7.6%
2. HP $3,339 27.3% $3,792 29.8% -11.9%
3. Dell $2,086 17.1% $1,929 15.2% 8.2%
4. Oracle $588 4.8% $764 6.0% -23.1%
5. Fujitsu $465 3.8% $598 4.7% -22.2%
Others $2,238 18.3% $1,854 14.6% 20.7%
All Vendors $12,219 100% $12,727 100% -4.0%

Source: IDC Worldwide Quarterly Server Tracker, November 2012.

In addition to the table above, a graphic showing the relative market shares of the top 5 server vendors for 3Q12 and 3Q11 is available at IDC.com. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

IDC's Server Taxonomy

IDC's Server Taxonomy maps the eleven price bands within the server market into three price ranges: volume servers, midrange servers and high-end servers. The revenue data presented in this release is stated as factory revenue for a server system. IDC presents data in factory revenue to determine market share position. Factory revenue represents those dollars recognized by multi-user system and server vendors for ISS and upgrade units sold through direct and indirect channels and includes the following embedded server components: Frame or cabinet and all cables, processors, memory, communications boards, operating system software, other bundled software and initial internal and external disk shipments.

IDC's Worldwide Quarterly Server Tracker is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly shipments (both ISS and upgrades) and revenues (both customer and factory), segmented by vendor, family, model, region, operating system, price band, CPU type, and architecture. For more information, please contact Lidice Fernandez at 305-351-3051 or [email protected].

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 48 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of their respective holders.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@CloudExpo Stories
"We work in the area of Big Data analytics and Big Data analytics is a very crowded space - you have Hadoop, ETL, warehousing, visualization and there's a lot of effort trying to get these tools to talk to each other," explained Mukund Deshpande, head of the Analytics practice at Accelerite, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Cloud Expo, Inc. has announced today that Andi Mann returns to 'DevOps at Cloud Expo 2016' as Conference Chair The @DevOpsSummit at Cloud Expo will take place on November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. "DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited t...
SaaS companies can greatly expand revenue potential by pushing beyond their own borders. The challenge is how to do this without degrading service quality. In his session at 18th Cloud Expo, Adam Rogers, Managing Director at Anexia, discussed how IaaS providers with a global presence and both virtual and dedicated infrastructure can help companies expand their service footprint with low “go-to-market” costs.
Basho Technologies has announced the latest release of Basho Riak TS, version 1.3. Riak TS is an enterprise-grade NoSQL database optimized for Internet of Things (IoT). The open source version enables developers to download the software for free and use it in production as well as make contributions to the code and develop applications around Riak TS. Enhancements to Riak TS make it quick, easy and cost-effective to spin up an instance to test new ideas and build IoT applications. In addition to...
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effi...
Internet of @ThingsExpo has announced today that Chris Matthieu has been named tech chair of Internet of @ThingsExpo 2016 Silicon Valley. The 6thInternet of @ThingsExpo will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"Avere Systems is a hybrid cloud solution provider. We have customers that want to use cloud storage and we have customers that want to take advantage of cloud compute," explained Rebecca Thompson, VP of Marketing at Avere Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Presidio has received the 2015 EMC Partner Services Quality Award from EMC Corporation for achieving outstanding service excellence and customer satisfaction as measured by the EMC Partner Services Quality (PSQ) program. Presidio was also honored as the 2015 EMC Americas Marketing Excellence Partner of the Year and 2015 Mid-Market East Partner of the Year. The EMC PSQ program is a project-specific survey program designed for partners with Service Partner designations to solicit customer feedbac...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, provided an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profession...
Let’s face it, embracing new storage technologies, capabilities and upgrading to new hardware often adds complexity and increases costs. In his session at 18th Cloud Expo, Seth Oxenhorn, Vice President of Business Development & Alliances at FalconStor, discussed how a truly heterogeneous software-defined storage approach can add value to legacy platforms and heterogeneous environments. The result reduces complexity, significantly lowers cost, and provides IT organizations with improved efficie...
In the world of DevOps there are ‘known good practices’ – aka ‘patterns’ – and ‘known bad practices’ – aka ‘anti-patterns.' Many of these patterns and anti-patterns have been developed from real world experience, especially by the early adopters of DevOps theory; but many are more feasible in theory than in practice, especially for more recent entrants to the DevOps scene. In this power panel at @DevOpsSummit at 18th Cloud Expo, moderated by DevOps Conference Chair Andi Mann, panelists discusse...
What does it look like when you have access to cloud infrastructure and platform under the same roof? Let’s talk about the different layers of Technology as a Service: who cares, what runs where, and how does it all fit together. In his session at 18th Cloud Expo, Phil Jackson, Lead Technology Evangelist at SoftLayer, an IBM company, spoke about the picture being painted by IBM Cloud and how the tools being crafted can help fill the gaps in your IT infrastructure.
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, discussed using predictive analytics to mon...
Most organizations prioritize data security only after their data has already been compromised. Proactive prevention is important, but how can you accomplish that on a small budget? Learn how the cloud, combined with a defense and in-depth approach, creates efficiencies by transferring and assigning risk. Security requires a multi-defense approach, and an in-house team may only be able to cherry pick from the essential components. In his session at 19th Cloud Expo, Vlad Friedman, CEO/Founder o...
"There's a growing demand from users for things to be faster. When you think about all the transactions or interactions users will have with your product and everything that is between those transactions and interactions - what drives us at Catchpoint Systems is the idea to measure that and to analyze it," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York Ci...
Ask someone to architect an Internet of Things (IoT) solution and you are guaranteed to see a reference to the cloud. This would lead you to believe that IoT requires the cloud to exist. However, there are many IoT use cases where the cloud is not feasible or desirable. In his session at @ThingsExpo, Dave McCarthy, Director of Products at Bsquare Corporation, will discuss the strategies that exist to extend intelligence directly to IoT devices and sensors, freeing them from the constraints of ...
The pace of innovation, vendor lock-in, production sustainability, cost-effectiveness, and managing risk… In his session at 18th Cloud Expo, Dan Choquette, Founder of RackN, discussed how CIOs are challenged finding the balance of finding the right tools, technology and operational model that serves the business the best. He also discussed how clouds, open source software and infrastructure solutions have benefits but also drawbacks and how workload and operational portability between vendors ...
The U.S. Army Intelligence and Security Command (INSCOM) has awarded BAE Systems a five-year contract worth as much as $75 million to provide enhanced geospatial intelligence technical and analytical support. The award was issued under the INSCOM Global Intelligence indefinite delivery, indefinite quantity contract.
Connected devices and the industrial internet are growing exponentially every year with Cisco expecting 50 billion devices to be in operation by 2020. In this period of growth, location-based insights are becoming invaluable to many businesses as they adopt new connected technologies. Knowing when and where these devices connect from is critical for a number of scenarios in supply chain management, disaster management, emergency response, M2M, location marketing and more. In his session at @Th...
The initial debate is over: Any enterprise with a serious commitment to IT is migrating to the cloud. But things are not so simple. There is a complex mix of on-premises, colocated, and public-cloud deployments. In this power panel at 18th Cloud Expo, moderated by Conference Chair Roger Strukhoff, Randy De Meno, Chief Technologist - Windows Products and Microsoft Partnerships at Commvault; Dave Landa, Chief Operating Officer at kintone; William Morrish, General Manager Product Sales at Interou...