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STAMFORD, Conn., December 3, 2014

Gartner Says EMEA Server Revenue Grew Despite Shipments Falling 4 Percent in the Third Quarter of 2014

In Europe, the Middle East and Africa (EMEA), server shipments in the third quarter of 2014 declined 4 percent, according to Gartner, Inc. Server revenue reached $2.9 billion, a 1.2 percent year-over-year increase.

"The server shipment growth seen in the second quarter proved to be a short-lived phenomenon, and marginal revenue growth of 1.2 percent in the third quarter of 2014 highlights the fragility of demand," said Errol Rasit, research director at Gartner. Server revenue grew for the third consecutive quarter after 10 consecutive quarters of revenue declines.

"Despite many positive growth expectations for the EMEA server market - such as an accelerated installed base refresh, cloud computing and digital business - many of these projects will bear fruit over many years, rather than providing a short-term uptick in demand. Today, these effects are not positive enough to radically outpace budgetary caution and server consolidation."

In the third quarter of 2014, HP extended its revenue share lead in EMEA with 6.4 percent growth (see Table 1). The vendor posted a strong result despite a shipment decline of 8.2 percent (see Table 2). HP’s growth in the third quarter was fueled by demand for blade and rack-optimized systems, the result of a fairly traditional demand profile throughout the quarter.

Dell moved to become the second-ranked vendor in terms of revenue and shipments, replacing IBM. Dell exhibited strong growth of 9 percent in revenue and 3.4 percent in shipments. This compares to double-digit declines for IBM’s revenue and shipments. Dell exhibited a consistent improvement in sales as it improved channel coverage, product breadth and solution offerings. IBM is experiencing a period of major transition as it completes the divestment of its x86 business, its RISC business undergoes renovation in the face of declining UNIX demand, and its mainframe business hits a cyclical low point in anticipation of new product releases.

Table 1                                                                                                                                                      

EMEA: Server Vendor Revenue Estimates, 3Q14 (U.S. Dollars)                                                                                                                                           

Company

3Q14

Revenue

3Q14 Market Share (%)

3Q13

Revenue

3Q13 Market Share (%)

3Q14-3Q13 Growth (%)

HP

 1,165,314,324

 40.63

 1,095,435,019

 38.6

 6.38

Dell

 453,965,225

 15.83

 416,240,750

 14.7

 9.06

IBM

 440,807,656

 15.37

 563,758,746

 19.9

-21.81

Fujitsu

 201,063,167

 7.01

 195,725,072

 6.9

 2.73

Cisco

 161,460,000

 5.63

 121,940,000

 4.3

 32.41

Others

 445,650,206

 15.54

 442,335,243

 15.6

 0.75

Total

 2,868,260,577

 100

 2,835,434,829

 100

 1.16

Source: Gartner (December 2014)

Table 2                                                                                                                                                      

EMEA: Server Shipment Estimates, 3Q14 (Units)                                                                                                                                                

Company

3Q14

Shipments

3Q14 Market Share (%)

3Q13

Shipments

3Q13 Market Share (%)

3Q14-3Q13 Growth (%)

HP

 203,294

 38.66

 221,427

 40.43

-8.19

Dell

 107,965

 20.53

 104,433

 19.07

 3.38

IBM

 37,979

 7.22

 44,673

 8.16

-14.98

Fujitsu

 29,941

 5.69

 29,900

 5.46

 0.14

Cisco

 16,705

 3.18

 15,259

 2.79

 9.48

Others

 129,907

 24.71

 131,935

 24.09

-1.54

Total

 525,791

 100

 547,627

 100

-3.99

Source: Gartner (December 2014)

"Many IT organizations are struggling to prioritize server projects in the context of broader data center modernization initiatives, such as networking and storage optimization," said Mr. Rasit. "The challenge for the server providers will be to help organizations make the right spending decisions to support IT project success during 2015. This may limit server spending in the short term, but will pay off in the long term as server projects rise in importance once again."

From a regional perspective, only Western Europe recorded revenue growth (4 per cent) compared to revenue declines of 6 and 7 percent in Eastern Europe and the Middle East and Africa, respectively. During the third quarter of 2014, x86 server revenue increased 6 percent in EMEA. RISC/Itanium Unix revenue declined 13.2 percent and the "Other CPU" segment’s revenue decreased by 39 percent.

"Eastern Europe and the Middle East and Africa continued to exhibit weakness in demand. These regions still contain the promise of long term growth, but macro-economic and geopolitical challenges in key markets have muted short-term server investment," said Mr. Rasit.

Additional information is available to subscribers of Gartner's program of quarterly statistics for servers, worldwide. This program provides worldwide market size and share data by vendor revenue and unit shipments. Segments include: region, vendor, brand, sub brand, CPU type, CPU family, Max sockets, platform, price band, operating systems and distribution channels.

About Gartner

Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.

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