Press Release

STAMFORD, Conn., November 30, 2016 View All Press Releases

Gartner Says Worldwide Server Revenue Declined 5.8 Percent in the Third Quarter of 2016; Shipments Were Down 2.6 Percent

In the third quarter of 2016, worldwide server revenue declined 5.8 percent year over year, and shipments declined 2.6 percent from the third quarter of 2015, according to Gartner, Inc. Among the top five vendors, only Cisco increased revenue in the third quarter, while Huawei and Inspur Electronics saw growth in shipments. HPE, Dell and Lenovo all experienced declines in both server revenue and shipments.

"The server market was impacted during the third quarter of 2016 by generally conservative spending plans globally. This was compounded by the ability of end users to leverage additional virtual machines on existing x86 servers (without new hardware) to meet their server application needs," said Jeffrey Hewitt, research vice president at Gartner. "Server providers will need to reinvigorate and improve their value propositions to help end users justify server hardware replacements and growth, if they hope to drive the market back into a positive state."

All regions showed a decline in shipments except Eastern Europe, which posted growth of 0.9 percent. In terms of revenue, all regions except for Japan experienced a decline. Japan grew by 1.3 percent.

x86 servers declined 2.3 percent in shipments and 1.6 percent in revenue in the third quarter of 2016. All vendors in the top five except for Cisco experienced a decline in revenue. In x86 server shipments, only Huawei and Inspur Electronics experienced growth.

Despite a decline of 11.8 percent, HPE continued to lead in the worldwide server market, based on revenue, with 25.5 percent market share (see Table 1). Dell declined 7.9 percent, but maintained the second spot in the market with 17.5 percent market share. Lenovo secured the third spot with 7.8 percent of the market. IBM dropped to the fifth position and experienced the largest decline among the top five vendors.

Table 1
Worldwide: Server Vendor Revenue Estimates, 3Q16 (U.S. Dollars)

Company

3Q16 Revenue

3Q16 Market Share (%)

3Q15 Revenue

3Q15 Market Share (%)

3Q15-3Q16 Growth (%)

HPE

3,247,087,045

25.5

3,682,417,477

27.3

-11.8

Dell

2,227,185,685

17.5

2,419,231,403

17.9

-7.9

Lenovo

994,447,261

7.8

1,065,664,119

7.9

-6.7

Cisco

929,440,000

7.3

885,600,000

6.6

5.0

IBM

889,723,595

7.0

1,327,761,197

9.8

-33.0

Others

4,426,866,909

34.8

4,120,053,348

30.5

7.4

Total

12,714,750,495

100.0

13,500,727,543

100.0

-5.8

Note: Beginning in the second quarter of 2016, HPE's server sales in China are reflected in H3C.

Source: Gartner (November 2016)

HPE secured the No 1 position in server shipments in the third quarter of 2016, with 18.3 percent of the market (see Table 2). Despite a decline of 9.8 percent, Dell secured the second spot with 16.8 percent market share. Huawei and Inspur were the only vendors in the top five to increase server shipments in the third quarter of 2016.

Table 2
Worldwide: Server Vendor Shipment Estimates, 3Q16 (Units)

Company

3Q16 Shipments

3Q16 Market Share (%)

3Q15 Shipments

3Q15 Market Share (%)

3Q15-3Q16 Growth (%)

HPE

493,268

18.3

613,101

22.2

-19.5

Dell

452,383

16.8

501,262

18.1

-9.8

Lenovo

228,097

8.5

242,005

8.8

-5.7

Huawei

163,355

6.1

134,163

4.9

21.8

Inspur Electronics

119,943

4.5

99,417

3.6

20.6

Others

1,234,567

45.9

1,172,725

42.4

5.3

Total

2,691,613

100.0

2,762,672

100.0

-2.6

Note: Beginning in the second quarter of 2016, HPE's server sales in China are reflected in H3C.

Source: Gartner (November 2016)

Additional information is available to clients who have access to Gartner's Servers Quarterly Statistics. This database provides worldwide market size and share data by vendor revenue and unit shipments. Segments include region, vendor, vendor brand, subbrand, CPU type, CPU group, max CPU, platform, price band, operating system and distribution channel.

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