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Analysts to Explore the Future of Server Infrastructure at the Gartner IT Infrastructure & Operations Management Summits, June 5-7 in Orlando, Florida, and June 12-13 in Frankfurt, Germany
The worldwide server market ended 2011 with mixed results, as worldwide server revenue declined 5.4 percent in the fourth quarter of 2011 and server shipments increased 4.5 percent, according to Gartner, Inc. For the year, worldwide server revenue grew 7.9 percent (see Table 3), and server shipments increased 7 percent (see Table 4).
“The shortage of hard-disk drive (HDD) inventory because of the Thailand floods in October 2011 provided supply issues, and many providers could not meet the demand in the last weeks of 2011, said Jeffrey Hewitt, research vice president at Gartner. “We expect the negative impact of these drive supply issues to continue into 1Q12.”
From a geographic perspective, all regions grew year-on-year in shipments for the quarter, with the exception of Western Europe which fell 3.1 percent for the period. In vendor revenue for the fourth quarter of 2011, Asia/Pacific, Eastern Europe, Japan and Middle East/Africa all posted mid-high-single-digit to low-double-digit year-on-year growth, while Canada, Latin America, USA and Western Europe all posted high-single-digit to low-double-digit declines.
IBM was the market leader in the worldwide server market based on revenue (see Table 1)--the company ended the year with $4.7 billion in revenue for the fourth quarter of 2011 for a total share of 33.7 percent. IBM’s revenue was down 10.2 compared to the same quarter in 2010. IBM’s growth was fueled by its Power Systems product line.
Of the top five global vendors, Dell was the only vendor to experience a growth in worldwide server revenue with 7.3 percent growth in the fourth quarter of 2011.
Table 1
Worldwide: Server Vendor Revenue Estimates, 4Q11 (U.S. Dollars)
Company | 4Q11 Revenue | 4Q11 Market Share (%) | 4Q10 Revenue | 4Q10 Market Share (%) | 4Q11-4Q10 Growth (%) |
IBM | 4,682,403,526 | 33.7 | 5,213,930,594 | 35.4 | -10.2 |
HP | 3,744,672,592 | 26.9 | 4,457,791,867 | 30.3 | -16.0 |
Dell | 2,060,795,399 | 14.8 | 1,920,161,049 | 13.1 | 7.3 |
Oracle | 735,403,237 | 5.3 | 805,582,264 | 5.5 | -8.7 |
Fujitsu | 496,164,699 | 3.6 | 560,391,957 | 3.8 | -11.5 |
Other Vendors | 2,192,866,498 | 15.8 | 1,753,824,781 | 11.9 | 25.0 |
Total | 13,912,305,950 | 100.0 | 14,711,682,511 | 100.0 | -5.4 |
Source: Gartner (February 2012)
In server shipments, HP remained the worldwide leader for the fourth quarter of 2011 (see Table 2). HP accounted for 28.1 percent of global shipments in the fourth quarter of 2011, despite a shipment decline of 8.1 percent.
Of the top 5 vendors in server shipments worldwide, Lenovo and Dell were the only vendors to post shipment increases. Lenovo’s shipments grew 51 percent, and Dell increased 11.2 percent compare to the fourth quarter of 2010.
The results for the quarter were centered around x86 server demand which increased in shipments by 5 percent and revenue by 2.6 percent for the fourth quarter of 2011.
Table 2
Worldwide: Server Vendor Shipments Estimates, 4Q11 (Units)
Company | 4Q11 Shipments | 4Q11 Market Share (%) | 4Q10 Shipments | 4Q10 Market Share (%) | 4Q11-4Q10 Growth (%) |
HP | 704,853 | 28.1 | 767,026 | 32.0 | -8.1 |
Dell | 573,125 | 22.9 | 515,274 | 21.5 | 11.2 |
IBM | 329,232 | 13.1 | 332,254 | 13.9 | -0.9 |
Fujitsu | 69,918 | 2.8 | 75,716 | 3.2 | -7.7 |
Lenovo | 49,084 | 2.0 | 32,516 | 1.4 | 51.0 |
Other Vendors | 777,971 | 31.1 | 674,338 | 28.1 | 15.4 |
Total | 2,504,184 | 100.0 | 2,397,124 | 100.0 | 4.5 |
Source: Gartner (February 2012)
Full Year 2011 Server Market Results
In 2011, the server market was fueled primarily by x86 servers which are the predominant platform used for large scale data center build outs, particularly in North America while emerging regions like Asia Pacific and Latin America also added to the growth for the year.
“2011 was a year that saw worldwide server growth driven by mega data centers and the explosion of client devices such as smartphones and tablets accessing Web content,” Mr. Hewitt said. “We have definitely seen a more pronounced segmentation between hyper-scale data centers and the traditional enterprise and mid-sized customer.”
“Ongoing blade server and ‘skinless’ server growth in the x86 segment also helped push 2011 results in spite of ongoing constraints in other segments such as RISC/Itanium Unix platforms,” Mr. Hewitt said.
Blade servers posted a revenue increase of 14.5 percent and a shipment increase of 4.2 percent for the year. HP was the 2011 leader in blade servers accounting for 44 percent of shipments, with IBM being in second place at 21 percent. Cisco grew to an 8 percent shipment share in the form factor to end the year in fourth place, just behind Dell who had 9.3 percent.
Table 3
Worldwide: Server Vendor Revenue Estimates, 2011 (U.S. Dollars)
Company | 2011 Revenue | 2011 Market Share (%) | 2010 Revenue | 2010 Market Share (%) | 2011-2010 Growth (%) |
IBM | 16,084,692,948 | 30.5 | 15,045,308,591 | 30.8 | 6.9 |
HP | 15,320,675,791 | 29.0 | 15,332,765,040 | 31.3 | -0.1 |
Dell | 7,739,416,989 | 14.7 | 7,187,356,464 | 14.7 | 7.7 |
Oracle | 3,233,735,150 | 6.1 | 3,095,981,831 | 6.3 | 4.4 |
Fujitsu | 2,528,149,487 | 4.8 | 2,141,541,849 | 4.4 | 18.1 |
Other Vendors | 7,886,618,272 | 14.9 | 6,121,005,750 | 12.5 | 28.8 |
Total | 52,793,288,638 | 100.0 | 48,923,959,524 | 100.0 | 7.9 |
Source: Gartner (February 2012)
Table 4
Worldwide: Server Vendor Shipments Estimates, 2011 (Units)
Company | 2011 Shipments | 2011 Market Share (%) | 2010 Shipments | 2010 Market Share (%) | 2011-2010 Growth (%) |
HP | 2,805,210 | 29.5 | 2,798,773 | 31.5 | 0.2 |
Dell | 2,111,149 | 22.2 | 2,070,118 | 23.3 | 2.0 |
IBM | 1,162,695 | 12.2 | 1,155,451 | 13.0 | 0.6 |
Fujitsu | 297,486 | 3.1 | 289,782 | 3.3 | 2.7 |
Lenovo | 159,725 | 1.7 | 100,528 | 1.1 | 58.9 |
Other Vendors | 2,986,906 | 31.4 | 2,482,661 | 27.9 | 20.3 |
Total | 9,523,171 | 100.0 | 8,897,313 | 100.0 | 7.0 |
Source: Gartner (February 2012)
“The outlook for 2012 suggests that growth will continue,” Mr. Hewitt said. “These increases continue to be buffered by the use of x86 server virtualization to consolidate physical machines as they are replaced, but the introduction of new processors from Intel and AMD is likely to help fuel and initiate a new round of server replacement cycles.”
In Europe, the Middle East and Africa (EMEA), server shipments reached 700,755 units in the fourth quarter of 2011, a decrease of 0.8 percent from the same period last year (see Table 6). Server revenue totaled $4.1 billion in the fourth quarter, a decline of 4.6 percent from the same quarter last year (see Table 5). For the year, EMEA server revenue grew 5 percent, and server shipments increased 3.3 percent.
"Following the recovery that started in 2010, the EMEA server market suffered a second consecutive decline in the fourth quarter, this time with both units and revenue declining," said Adrian O'Connell, research director at Gartner. "Whilst the Eastern Europe and Middle East and Africa regions saw growth, this was not enough to offset the weakness in Western Europe where revenue declined by nearly 8 percent. The market has failed to recover to anywhere near pre-downturn levels. Current market revenue levels are only around three quarters of what we saw in the fourth quarter of 2007, which underlines how much pressure vendors are currently under."
The fourth quarter of 2011 saw mixed results in the key segments. While x86 system revenue was flat growing at 0.6 percent in the fourth quarter of 2011, the "Other CPU" category declined 20.9 percent and RISC/Itanium UNIX systems declined 3.9 percent. "The "Other CPU" category is highly cyclical and prone to swings up and down, but the RISC/Itanium UNIX segment in particular is increasingly facing longer term challenges as many users look at alternative platforms. The economic challenges in EMEA also continue to impact the server market as spending is constrained in each of the key technology segments," said Mr. O'Connell.
Of the top five vendors, only Dell and Oracle — ranked No. 3 and No. 4 respectively — managed to achieve revenue growth in the fourth quarter of 2011. HP held onto the No. 1 position, despite a 10.9 percent decline year-on-year. Second-ranked IBM also declined, by 8.2 percent, largely due to cyclical weakness in its System z product line. In volume terms, Dell and Cisco — ranked No. 2 and No. 5 respectively — were the only vendors in the top five ranking to achieve year-on-year growth.
Mr. O'Connell added: "Overall, RISC and Itanium Unix revenue decreased 3.9 percent in the fourth quarter of 2011, although this top-level figure does not tell the whole story. HP had weak results in this segment, but IBM is benefiting from the difficulties of other vendors and consolidating its lead." IBM grew RISC/Itanium UNIX revenue by 21.4 percent and ended the fourth quarter with a 48.4 percent share of revenue in this segment.
"With a weak economic backdrop expected to persist throughout 2012, server vendors are likely to continue facing difficult market conditions over the next few quarters," said Mr. O'Connell. "However, with the x86 segment going through a replacement cycle this year there will be opportunities to gain share for vendors with the best execution."
Table 5
EMEA: Server Vendor Revenue Estimates, 4Q11 (U.S. Dollars)
Company | 4Q11 Revenue | 4Q11 Market Share (%) | 4Q10 Revenue | 4Q10 Market Share (%) | 4Q11-4Q10 Growth (%) |
1,394,256,341 | 34.0 | 1,565,689,575 | 36.4 | -10.9 | |
IBM | 1,274,476,789 | 31.1 | 1,388,060,314 | 32.3 | -8.2 |
Dell | 485,004,371 | 11.8 | 441,637,041 | 10.3 | 9.8 |
Oracle | 244,889,278 | 6.0 | 217,507,212 | 5.1 | 12.6 |
Fujitsu | 209,486,138 | 5.1 | 252,238,215 | 5.9 | -16.9 |
Other Vendors | 496,304,972 | 12.1 | 438,815,084 | 10.2 | 13.1 |
Total | 4,104,417,889 | 100.0 | 4,303,947,440 | 100.0 | -4.6 |
Source: Gartner (February 2012)
Table 6
EMEA: Server Vendor Shipment Estimates, 4Q11 (Units)
Company | 4Q11 Shipments | 4Q11 Market Share (%) | 4Q10 Shipments | 4Q10 Market Share (%) | 4Q11-4Q10 Growth (%) |
HP | 290,194 | 41.4 | 307,959 | 43.6 | -5.8 |
Dell | 134,684 | 19.2 | 118,874 | 16.8 | 13.3 |
IBM | 97,601 | 13.9 | 98,172 | 13.9 | -0.6 |
Fujitsu | 36,023 | 5.1 | 43,007 | 6.1 | -16.2 |
Cisco | 11,580 | 1.7 | 4,987 | 0.7 | 132.2 |
Other Vendors | 130,673 | 18.6 | 133,204 | 18.9 | -1.9 |
Total | 700,755 | 100.0 | 706,202 | 100.0 | -0.8 |
Source: Gartner (February 2012)
Additional information is available to subscribers of Gartner’s Servers Quarterly Statistics Worldwide program. This program provides worldwide market size and share data by vendor revenue and unit shipments. Segments include: region, vendor, vendor brand, sub brand, CPU type, CPU group, Max CPU, platform, price band, operating systems and distribution channels.
Additional information on the server market will be discussed at the Gartner IT Infrastructure & Operations Management Summits in Orlando and Frankfurt. The Orlando event is being held June 5-7 at the Peabody Orlando hotel. Additional information is available at http://www.gartner.com/technology/summits/na/it-operations/. Members of the media can register by contacting Christy Pettey at christy.pettey@gartner.com.
The Frankfurt Summit is being held June 12-13 at the Sheraton Frankfurt Airport Hotel. Additional information is available at http://www.gartner.com/technology/summits/emea/it-operations/. Members of the media can register by contacting Laurence Goasduff at laurence.goasduff@gartner.com.
Additional information from the event will be shared on Twitter at http://twitter.com/Gartner_inc and using #GartnerITOM.
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