What goes up must come down, and that applies to the server market in Q2 too

Canada and EMEA see growth. As for the rest of the world...


"The bigger they are, the harder they fall" seems an appropriate phrase to describe the predicament facing server vendors. Following a record 2018, almost of all the major manufacturers recorded slimmer numbers in Q2.

IDC stats show market revenue declined globally by 11.6 per year-on-year to $20bn, and shipments were down 9.3 per cent to 2.961 million units.

"The second quarter saw the server market's first contraction in nine quarters, albeit against a very difficult compare from one year ago when the server market realised unprecedented growth," said IDC research manager Sebastian Lagana.

"Irrespective of the difficult compare, factors impacting the market include a slowdown in purchasing from cloud providers and hyperscale customers, an off-cycle in the cyclical non-x86 market, as well as a slowdown from enterprises due to capacity slack and microeconomic uncertainty," he added.

The world's cloud slingers hit pause on spending earlier this year, something noted by all the major enterprise vendors, and the cycle that carried IBM on a refresh wave with its Power range has run its course. There is also talk of trade tensions between China and the US denting confidence, as well as the slowdown in certain economies including the Middle Kingdom.

In revenue terms, Dell was the world's largest server maker, selling $3.809bn worth of kit, down 13 per cent on the year-ago period. HP came in next with $3.607bn, down 3.6 per cent.

ODM Inspur, in third place, was the only major vendor to report growth, up 32.3 per cent to $1.438bn. It was also the only major top-five vendor to see shipments rise.

Lenovo was relegated to fourth spot as revenue shrank 21.8 per cent to $1.212bn, IBM dropped 27.4 per cent to $1.188bn and even the ODM Direct category – comprised of white-box builders based in the Far East – was down, falling 22.9 per cent to $4.232bn. The rest of the market fell 4.8 per cent to $4.536bn.

Canada was the fastest growing market, with 13.4 per cent revenue growth, followed by EMEA, up 2 per cent on aggregate. Japan was down 6.7 per cent, the wider Asia Pacific region was down 8.1 per cent, the US collapsed 19.1 per cent, Latin America was down 34.2 per cent, and China was down 8.7 per cent.

x86 revenues dropped 10.6 per cent to $18.4bn and non-x86 server dropped 21.5 per cent to $1.6bn.

Ouch. Ouch. Ouch. ®

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