Server market slumps as everyone stops buying

Clouds, boffins, businesses all keep hands in pockets. And ARMs are nowhere


Abacus-shuffler IDC's Worldwide Quarterly Server Tracker for the year's third quarter makes for ugly reading: the firm says just about all categories of server sales have stalled.

Revenue was down 7.0 per cent, year over year, and shipments decreased 4.6 per cent. It's not all bad, there's still 2.38m machines and US$12.5 billion a quarter to be fought over, plus the sweet, sweet nectar of maintenance revenue.

Kuba Stolarski, IDC's research director for Computing Platforms, is at a loss to explain the dip. “Previously healthy volume server growth faltered,” he said, “suggesting that weakness in enterprise demand was more pronounced than expected.”

“While cloud datacenter buildouts by key hyperscalers helped in part to prop up the quarterly results, the overwhelming downward trend was difficult to overcome.”

His key takeaway: don't count on the server market to deliver you a Christmas bonus.

As the table below shows, only Cisco and ODMs have black ink to trumpet.

Pause a moment to consider IBM's performance as it's now well clear of the x86 business and still owns 6.9 per cent of the market. Which would be a nice number were it not for the fact that the whole non-x86 server market clocked up a of 30.1 per cent year over year decline, to $1.3 billion. Big Blue may own just under two thirds of the market, but its share dropped faster than the overall non-x86 market, by 32.9 per cent year-over-year.

Top 5 Vendor Groups, Worldwide Server Systems Vendor Revenue, Market Share, and Growth, Third Quarter of 2016 (Revenues are in Millions)

Vendor

3Q16 Revenue

3Q16 Market Share

3Q15 Revenue

3Q15 Market Share

3Q16/3Q15 Revenue Growth

1. HPE

$3,238.2

25.9%

$3,682.8

27.4%

-12.1%

2. Dell Technologies

$2,226.7

17.8%

$2,439.3

18.2%

-8.7%

3. Lenovo*

$986.4

7.9%

$1,065.8

7.9%

-7.4%

3. Cisco*

$928.0

7.4%

$885.6

6.6%

4.8%

3. IBM*

$864.4

6.9%

$1,287.6

9.6%

-32.9%

ODM Direct

$1,291.7

10.3%

$1,210.0

9.0%

6.8%

Others

$2,962.8

23.7%

$2,868.2

21.3%

3.3%

Total

$12,498.2

100%

$13,439.2

100%

-7.0%

IDC's Worldwide Quarterly Server Tracker, November 2016

One last thing: IDC says ARM servers “have yet to make an impact on the server market.” The firm says it can find only “minimal revenue” from the architecture. ®

* Note: IDC declares a statistical tie in the worldwide server market when there is a difference of one percent or less in the vendor revenue shares among two or more vendors.




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