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Analyst: Server market is stable

Posted: 06 Dec 2011 ?? ?Print Version ?Bookmark and Share

Keywords:server market? blade server? hyper-scale server? x86 server?

International Data Corp. (IDC) has released its recent data concerning the latest market trends in the server market. According to market research firm, factory revenue in the global server market climbed 4.2 percent YoY to $12.7 billion in 3Q11.

Although this is the seventh consecutive quarter of YoY revenue growth, it is the slowest quarterly growth rate since the market recovery began in 1Q10. The company added that server unit shipments increased four percent YoY in the same period. However, server shipment growth moderated slightly from the 8.7 percent YoY reported in 2Q11.

Improved market conditions were seen across all three server classesvolume, midrange enterprise and high-end enterprise. Volume systems experienced five percent YoY revenue increase, the eighth consecutive quarter of positive growth for the segment. Midrange enterprise demand improved for the fifth time in the past six quarters, with a 4.7 percent YoY revenue increase. Finally, the improving market conditions extended to the high-end enterprise segment, as quarterly revenue increased 1.1 percent compared to 3Q10. This is the third consecutive quarter that all three segments of the server market have experienced a YoY revenue increase in the same quarter.

"After nearly two years of steady revenue growth, the server market began to decelerate in 3Q11 as demand stabilized for many system categories," stated Matt Eastwood, VP and GM, enterprise platforms at IDC. "APAC and Japan exhibited strong revenue growth while server demand in EMEA, North America and Latin America was flat to slightly down year over year. IDC continues to believe that weakening macroeconomic conditions around the world will serve to further moderate demand for new servers in 2012."

IBM and HP jointly held the number 1 position in the worldwide server market each with 29.8 percent factory revenue share for 3Q11. IBM had a 3.5 percent YoY growth in factory revenue with particular strength in Power Systems demand. HP lost 2.5 points of share in 3Q11 as factory revenue declined 3.8 percent YoY largely because of weakening demand for Itanium-based Integrity systems. Dell was in third place with 15.1 percent factory revenue market share in 3Q11. Dell gained 1.2 points of share on 13.1 percent revenue growth driven in part by driven by richer product configurations. Oracle maintained the number 4 position in the worldwide server market, with a YoY revenue decline of 3.2 percent in 3Q11 and now holds six percent market share. Fujitsu's revenue declined by 0.4 percent, maintaining a 4.8 percent revenue share in 3Q11.

server market

Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, 3Q11 (Revenues are in Millions).

IDC revealed that Linux server demand was positively impacted by strong x86 server deployments, as hardware revenue improved 12.3 percent in 3Q11 to $2.3 billion in 3Q10. Linux servers now represent 18.6 percent of all server revenue, up 0.9 points compared with 3Q10. Microsoft Windows server demand also improved in 3Q11 as hardware revenue increased 5.3 percent and unit shipments increased two percent YoY. Quarterly revenue of $6.3 billion for Windows servers represented 49.7 percent of overall quarterly factory revenue.

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