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Gartner Says Worldwide Server Shipments Grew 1.9 Percent, While Revenue Decreased 2.1 Percent in the Third Quarter of 2013

In the third quarter of 2013, worldwide server shipments grew 1.9 percent year-on-year, while revenue declined 2.1 percent from the third quarter of 2012, according to Gartner, Inc.

“The worldwide server market remains in a relatively weak performance mode as we move through the second half of the year,” said Jeffrey Hewitt, research vice president at Gartner. “There were only three regions that exhibited positive vendor revenue growth. They were Canada at 6.5 percent, the Middle East and Africa at 12.1 percent and the United States with 0.9 percent growth. In shipments, the Middle East and Africa had the greatest increase at 13 percent compared to the third quarter of 2012.”

“x86 servers maintained low levels of growth at 2.1 percent in units year-on-year and 4.4 percent in revenue. RISC/Itanium Unix servers continued to decline at 4.5 percent and 31 percent in vendor revenue compared to the same quarter last year. The ‘other’ CPU category, which is primarily mainframes, showed an increase of 7.8 percent,” Mr. Hewitt said.

HP had the lead in the worldwide server market based on revenue (see Table 1). The company posted just over $3.4 billion in server vendor revenue for a total share of 27.6 percent worldwide for the third quarter of 2013. This was up 2.2 percent year-on-year.

HP and Cisco were the only vendors in the top five to have revenue increases in the third quarter of 2013.

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

Company

3Q13

Revenue

3Q13 Market Share (%)

3Q12

Revenue

3Q12 Market Share (%)

3Q13-3Q12 Growth (%)

HP

3,404,811,159

27.6

3,330,804,391

26.4

2.2

IBM

2,821,114,540

22.9

3,479,454,267

27.6

-18.9

Dell

2,025,411,030

16.4

2,099,469,317

16.7

-3.5

Cisco

599,300,000

4.9

419,900,000

3.3

42.7

Oracle

500,438,000

4.1

592,040,000

4.7

-15.5

Others

2,989,616,696

24.2

2,684,112,837

21.3

11.4

Total

12,340,691,425

100.0

12,605,780,812

100.0

-2.1

Source: Gartner (December 2013)

In server shipments, HP remained the worldwide leader in the third quarter of 2013 (see Table 2) with a year-on-year shipment increase of 5.4 percent for the quarter. HP’s worldwide server shipment share was 26.7 percent representing a 0.9 percent increase in share from the same quarter in 2012.

Of the top five vendors in server shipments worldwide, only HP and Huawei produced shipment increases in the third quarter of 2013.

In terms of server form factors, blade servers fell 1.5 percent in shipments, but grew 3 percent in revenue in the quarter. The rack-optimized form factor climbed 2.6 percent in shipments and, but fell 1.8 percent in revenue for the third quarter of 2013.

Table 2
Worldwide: Server Vendor Shipments Estimates, 3Q13 (Units)

Company

3Q13

Shipments

3Q13 Market Share (%)

3Q12

Shipments

3Q12 Market Share (%)

3Q13-3Q12 Growth (%)

HP

669,103

26.7

634,793

25.8

5.4

Dell

484,607

19.3

564,475

23.0

-14.1

IBM

201,777

8.1

280,424

11.4

-28.0

Huawei

69,573

2.8

23,027

0.9

202.1

Fujitsu

68,424

2.7

76,128

3.1

-10.1

Others

1,012,739

40.4

879,742

35.8

15.1

Total

2,506,223

100.0

2,458,589

100.0

1.9

Source: Gartner (December 2013)

In Europe, the Middle East and Africa (EMEA), both server shipments and revenue declined in the third quarter of 2013. Server shipments totaled nearly 548,000 units in the third quarter of 2013, a decrease of 7.2 percent from the same period last year (see Table 4). Server revenue totaled $2.8 billion in the quarter, a decline of 4.3 percent from the same quarter last year (see Table 3).

“The performance of server shipments and revenue in EMEA is in a downward spiral,” said Adrian O’Connell, research director at Gartner. “Revenue has now declined for nine consecutive quarters and shipments have declined for eight. Server revenue across EMEA is at its lowest level for over 15 years which underlines the increasing contraction of the server market.”

From a regional perspective, both Western Europe and Eastern Europe declined in revenue, with a decline of 4.8 percent and 13 percent, respectively. The Middle East and Africa was the only region to exhibit revenue growth with an increase of 12.1 percent

In the third quarter of 2013, x86 server revenue decreased 0.1 percent, while RISC/Itanium UNIX revenue declined 29.4 percent and the Other CPU segment revenue increased 15.2 percent. The non-x86 platforms continued to suffer from platform migrations, although the RISC/Itanium UNIX platform is the most adversely affected. “The fourth quarter is typically the strongest quarter of the year for these platforms, but even a strong end to the year will not change the long term downward trend,” said Mr. O’Connell.

In terms of vendor performances, three vendors in the top five ranking showed a revenue decline in the third quarter of 2013. HP maintained its lead in terms of overall revenue, delivering a revenue increase of 1.1 percent as it continues to improve its execution. Second-ranked IBM saw its revenue decline 19.2 percent as the positive effects of its mainframe refresh diminished. Fourth-ranked Fujitsu was amongst the two vendors in the top five to see a revenue increase, at 1.5 percent. Cisco, ranked in the No. 6 position, closed the gap with fifth-ranked Oracle in the third quarter of 2013, with less than 1 percent market share difference between the two vendors. Cisco was also the only top five vendors to exhibit a shipment growth in the third quarter of 2013, achieving a double-digit shipment growth. Cisco’s focus on the blade server segment is helping it to achieve strong competitive gains at a time when the overall market is getting increasingly constrained.

“Weak demand continues to make EMEA one of the hardest regions for server vendors to do business in,” said Mr. O’Connell. “The market is resetting itself to a new level with architectural shifts making life very challenging for vendors that have relied on high-end platforms in the past. The ongoing economic weakness plays its part here, but there is also a broader shift taking place that brings a new set of competitive challenges. The fourth quarter is also expected to be weak, making 2013 a year to forget for most server vendors.”

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

Company

3Q13

Revenue

3Q13 Market Share (%)

3Q12

Revenue

3Q12 Market Share (%)

3Q13-3Q12 Growth (%)

HP

1,095,435,019

38.6

1,083,893,433

36.6

1.1

IBM

563,758,746

19.9

697,969,730

23.6

-19.2

Dell

416,240,750

14.7

454,751,400

15.3

-8.5

Fujitsu

195,725,072

6.9

192,858,138

6.5

1.5

Oracle

145,127,020

5.1

171,691,600

5.8

-15.5

Others

419,148,223

14.8

361,854,511

12.2

15.8

Total

2,835,434,829

100.0

2,963,018,812

100.0

-4.3

Source: Gartner (December 2013)

Table 4

EMEA: Server Vendor Shipments Estimates, 3Q13 (Units)

Company

3Q13

Shipments

3Q13 Market Share (%)

3Q12

Shipments

3Q12 Market Share (%)

3Q13-3Q12 Growth (%)

HP

221,427

40.4

233,538

39.6

-5.2

Dell

104,433

19.1

119,443

20.2

-12.6

IBM

44,673

8.2

70,712

12.0

-36.8

Fujitsu

29,900

5.5

31,738

5.4

-5.8

Cisco

15,259

2.8

11,756

2.0

29.8

Others

131,935

24.1

122,698

20.8

7.5

Total

547,627

100.0

589,885

100.0

-7.2

Source: Gartner (December 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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