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Gartner Says Worldwide Server Shipments Declined 0.7 Percent; Revenue Declined 5 Percent in First Quarter of 2013

In the first quarter 2013, worldwide server shipments declined 0.7 percent year-on-year, while revenue declined 5.0 percent from the first quarter of 2012, according to Gartner, Inc. 

“The first quarter of 2013 was certainly not a strong period for the server market on a global level,” said Jeffrey Hewitt, research vice president at Gartner. “The only regions to post increases were Asia/Pacific and the United States, with Asia/Pacific showing the strongest growth with shipment and revenue increases of 7 percent and 1.7 percent, respectively. While these two regions grew in both shipments and revenue, it was not enough to offset the declines of the other geographies--all of which declined in server shipments and revenue for the quarter.” 

“x86 server shipment growth was flat in the quarter, while revenue increased 1.8 percent. RISC/Itanium Unix servers declined globally for the period, down 38.8 percent in shipments and down 35.8 percent in vendor revenue compared to the same quarter last year. The ‘other’ CPU category, which is primarily mainframes, exhibited an increase of 3.6 percent in worldwide revenue.” 

IBM had the lead in the worldwide server market based on revenue (see Table 1). The company totaled just over $3 billion in server vendor revenue worldwide, with a total share of 25.5 percent in the first quarter of 2013. This share was down 2.5 percentage points from the same period in 2012. In the first quarter of 2013, system x accounted for 29.3 percent of IBM’s total server revenue. 

All of the top five vendors suffered revenue declines in the first quarter of 2013 except for Dell which grew 14.4 percent. 

Table 1
Worldwide: Server Vendor Revenue Estimates, 1Q13 (U.S. Dollars)

Company

1Q13

Revenue

1Q13 Market Share (%)

1Q12

Revenue

1Q12 Market Share (%)

1Q13-1Q12 Growth (%)

IBM

3,016,060,031

25.5

3,490,477,200

28.0

-13.6

HP

2,959,030,197

25.0

3,455,759,513

27.8

-14.4

Dell

2,124,462,397

18.0

1,857,578,951

14.9

14.4

Fujitsu

583,238,840

4.9

626,721,932

5.0

-6.9

Oracle

538,542,499

4.6

739,825,931

5.9

-27.2

Others

2,604,390,348

22.0

2,273,724,071

18.3

14.5

Total

11,825,724,312

100.0

12,444,087,599

100.0

-5.0

Source: Gartner (May 2013)

In server shipments, HP remained the worldwide leader in the first quarter of 2013 (see Table 2) in spite of a year-on-year shipment decline of 15.2 percent. Dell and Cisco were the only vendors in the top five to have positive shipment growth, with increases of 2.6 percent and 33 percent. 

In terms of server form factors, blade servers fell 5.9 percent in shipments and 5 percent in revenue for the quarter. The rack-optimized form factor dropped 5.2 percent in shipments and 2 percent in revenue in the first quarter of 2013. 

Table 2
Worldwide: Server Vendor Shipments Estimates, 1Q13 (Units)

Company

1Q13

Shipments

1Q13 Market Share (%)

1Q12

Shipments

1Q12 Market Share (%)

1Q13-1Q12 Growth (%)

HP

580,563

24.9

685,015

29.2

-15.2

Dell

516,355

22.2

503,450

21.5

2.6

IBM

230,446

9.9

267,556

11.4

-13.9

Fujitsu

73,375

3.2

86,360

3.7

-15.0

Cisco

53,873

2.3

40,498

1.7

33.0

Others

            874,396

37.5

            763,205

32.5

14.6

Total

2,329,009

100.0

2,346,083

100.0

-0.7

Source: Gartner (May 2013) 

In Europe, the Middle East and Africa (EMEA) server shipments surpassed 580,000 units in the first quarter of 2013, a decrease of 6.8 percent from the same period last year (see Table 4). Server revenue totaled $2.96 billion, a decline of 9.6 percent from the first quarter last year (see Table 3). 

"Following a challenging 2012, 2013 started in very much the same way," said Adrian O'Connell, research director at Gartner. "Budgets are restricted and server infrastructure spending is clearly not the highest priority for many organizations." 

Each of the three EMEA subregions suffered a contraction in server revenue in the first quarter of 2013: in Western Europe revenue declined by 9.6 percent, in Eastern Europe it fell by 9.4 percent, and in the Middle East and Africa it decreased by 13.4 percent.

In the first quarter of 2013, x86 server revenue increased by a modest 1.8 percent. RISC/Itanium Unix server revenue declined by 54.8 percent, due to migrations to alternative platforms by users seeking lower-cost alternatives and more flexibility. Revenue in the Other CPU segment dropped by 9.9 percent, following growth in the fourth quarter of 2012. 

Dell and Fujitsu were the only server vendors to exhibit revenue growth in EMEA. The market environment remains difficult for all vendors, but those most exposed to the enterprise customer segment face the biggest challenges. 

It will be little consolation to vendors in EMEA that this region did not deliver the worst performance of the quarter, as Japan experienced a 19.0 percent decline. Asia/Pacific and United States were the only regions to show growth. 

"The reality for server vendors is that spending levels are very low and there is severe weakness in the high-end segment. There are still areas of opportunity, but vendors need to be agile and focused on addressing them. The outlook for 2013 remains challenging," said Mr. O'Connell. 

Table 3
EMEA: Server Vendor Revenue Estimates, 1Q13 (U.S. Dollars)

Company

1Q13

Revenue

1Q13 Market Share (%)

1Q12

Revenue

1Q12 Market Share (%)

1Q13-1Q12 Growth (%)

HP

   1,034,411,365

35.0

   1,182,133,525

36.1

-12.5

IBM

       617,383,854

20.9

       820,816,620

25.1

-24.8

Dell

       517,483,000

17.5

       435,061,700

13.3

18.9

Fujitsu

       228,659,643

7.7

       226,239,681

6.9

1.1

Oracle

       161,562,750

5.5

       221,947,780

6.8

-27.2

Others

       397,854,330

13.5

       385,808,665

11.8

3.1

Total

   2,957,354,943

100.0

   3,272,007,970

100.0

-9.6

Source: Gartner (May 2013) 

Table 4
EMEA: Server Vendor Shipments Estimates, 1Q13 (Units)

Company

1Q13

Shipments

1Q13 Market Share (%)

1Q12

Shipments

1Q12 Market Share (%)

1Q13-1Q12 Growth (%)

HP

               218,610

37.5

               251,947

40.2

-13.2

Dell

               132,187

22.7

               128,833

20.6

2.6

IBM

                 56,184

9.6

                 63,993

10.2

-12.2

Fujitsu

                 36,463

6.2

                 40,127

6.4

-9.1

Cisco

                 14,691

2.5

                    9,441

1.5

55.6

Others

               125,308

21.5

               131,744

21.0

-4.9

Total

               583,443

100.0

               626,085

100.0

-6.8

Source: Gartner (May 2013) 

Additional information is available to subscribers of Gartner 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.

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