Press Release

STAMFORD, Conn., March 2, 2017 View All Press Releases

Gartner Says Worldwide Server Revenue Declined 1.9 Percent in the Fourth Quarter of 2016, While Shipments Fell 0.6 Percent

Revenue Declined 2.7 Percent and Shipments Grew 0.1 Percent in Full Year 2016

In the fourth quarter of 2016, worldwide server revenue declined 1.9 percent year over year, while shipments fell 0.6 percent from the fourth quarter of 2015, according to Gartner, Inc. In all of 2016, worldwide server shipments grew 0.1 percent, but server revenue declined 2.7 percent.

"There were some distinct factors that produced the final results for 2016," said Jeffrey Hewitt, research vice president at Gartner. "Hyperscale data centers (e.g., Facebook, Google) grew and, at the same time, drove some significant server replacements. Enterprises grew at a lower rate as they continued to leverage server applications through virtualization and in some cases, service providers in the cloud."

From a regional perspective, Asia/Pacific was the only region to exhibit positive growth in both shipments and revenue in the fourth quarter of 2016. All other regions declined, with Latin America experiencing the largest decline in shipments (12.2 percent, while the Middle East and Africa declined 14.7 percent in terms of revenue.

Hewlett Packard Enterprise (HPE) led the worldwide server market based on revenue in the fourth quarter of 2016 (see Table 1). The company ended the year with $3.4 billion in revenue for the fourth quarter of 2016 for a total share of 22.9 percent worldwide. However, revenue was down 11 percent compared with the same quarter in 2015.

Of the top five global vendors, only Dell and Huawei exhibited growth for the quarter, increasing 1.8 percent and 88.4 percent, respectively.

Table 1. Worldwide: Server Vendor Revenue Estimates, 4Q16 (U.S. Dollars)

Company

4Q16
Revenue

4Q16 Market Share (%)

4Q15
Revenue

4Q15 Market Share (%)

4Q16-4Q15 Growth (%)

HPE

3,392,601,012

22.9

3,813,592,269

25.2

-11.0

Dell

2,578,181,854

17.4

2,533,495,993

16.7

1.8

IBM

1,732,474,861

11.7

1,974,018,084

13.0

-12.2

Huawei

1,249,813,371

7.7

610,225,437

4.0

88.4

Lenovo

946,283,185

6.4

1,136,141,494

7.5

-16.7

Others

5,039,143,533

34.0

5,064,301,087

33.5

-0.5

Total

14,838,497,815

100.0

15,131,774,365

100.0

-1.9

Source: Gartner (March 2017)

Dell grew 6.5 percent and moved into the No. 1 position in worldwide server shipments in the fourth quarter of 2016, with 19.1 percent of the market. HPE experienced a decline of 19.4 percent and fell to the second spot with 17.2 percent market share. Huawei experienced the strongest shipment growth in the fourth quarter of 2016, increasing 64 percent over the same period last year (see Table 2).

Table 2. Worldwide: Server Vendor Shipments Estimates, 4Q16 (Units)

Company

4Q16
Shipments

4Q16 Market Share (%)

4Q15
Shipments

4Q15 Market Share (%)

4Q16-4Q15 Growth (%)

Dell

562,029

19.1

527,736

17.9

6.5

HPE

504,407

17.2

625,543

21.2

-19.4

Huawei

245,611

8.4

149,742

5.1

64.0

Lenovo

220,296

7.5

256,571

8.7

-14.1

Inspur Electronics

141,132

4.8

140,166

4.7

0.7

Others

1,265,169

42.1

1,255,747

42.5

0.8

Total

2,938,644

100.0

2,955,505

100.0

-0.6

Source: Gartner (March 2017)

x86 server demand increased in revenue by 1.1 percent, however, shipments declined 0.3 percent in the fourth quarter of 2016.

Full Year 2016 Server Market Results

In 2016, worldwide server shipments increased 0.1 percent, while revenue declined 2.7 percent.

"x86 servers continue to be the predominant platform used for large-scale data center build-outs across the globe, and the growth of integrated systems (including hyperconverged integrated systems), while still relatively small as an overall percentage of the hardware infrastructure market, also provided a boost to the x86 server space for the year," said Mr. Hewitt. "The outlook for 2017 suggests that modest growth will occur being driven primarily by service provider build-outs while the enterprise will show a slight decline in unit purchases with only slight growth in revenue."

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.

Server market trends and IT operations will be further discussed at the Gartner IT Infrastructure, Operations & Data Center Summits 2017 in Sao Paulo, Brazil, Mumbai, India, Sydney, Australia, and at the Gartner Data Center, Infrastructure and Operations Management Summit London and Las Vegas. Follow news and updates from these events on Twitter using #GartnerDC.

These topics will also be discussed at the Gartner IT Operations Strategies & Solutions Summit 2017 taking place May 8-10 in Orlando and at the Gartner IT Infrastructure & Operations Management Summit 2017, June 12-13 in Frankfurt, Germany. Follow news and updates from these events on Twitter using #GartnerIOM.

Contacts
About Gartner

Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior information technology (IT) leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to supply chain professionals, digital marketing professionals and technology investors, Gartner is the valuable partner to clients in more than 11,000 distinct enterprises. Gartner works with clients to research, analyze and interpret the business of IT within the context of their individual roles. Gartner is headquartered in Stamford, Connecticut, U.S.A., and has almost 9,000 associates, including 1,900 research analysts and consultants, operating in more than 90 countries. For more information, visit www.gartner.com.

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.