Welcome!

SAP HANA Cloud Authors: Liz McMillan, Elizabeth White, Pat Romanski, Kevin Knuese, Ed Featherston

News Feed Item

Worldwide Server Market Revenues Decline 4.0% in Third Quarter as Market Demand Remained Soft, According to IDC

According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market decreased 4.0% year over year to $12.2 billion in the third quarter of 2012 (3Q12). This is the fourth consecutive quarter of year-over-year revenue decline, as server market demand continued to soften following a strong refresh cycle that characterized the market in most of 2010 and 2011. After declining in 2Q12, server unit shipments increased 0.6% year over year in 3Q12 to 2.1 million units. This was the 11th time in the past 12 quarters that server units have grown on a year-over-year basis.

On a year-over-year basis, volume systems experienced a 0.5% revenue decline. At the same time, demand for midrange and high-end systems experienced year-over-year revenue declines of 14.0% and 8.9% respectively in 3Q12. All three segments were impacted by difficult year-over-year compares combined with transitions in the technology refresh cycles.

"Worldwide server revenue declined for the fourth consecutive quarter in 3Q12. The market was constrained by poor macro-economic conditions in many geographies coupled with a number of technology transitions that served to further hamper the market," said Matt Eastwood, group vice president and general manager, Enterprise Platforms at IDC. "In fact, every geographic region except Asia/Pacific experienced revenue contraction in the quarter. The growth in Asia/Pacific was largely driven by strong demand in China, which helped a China-based server vendor – Inspur – into a top 10 factory revenue position for the first time."

Overall Server Market Standings, by Vendor

IBM held the number 1 position in the worldwide server market with 28.7% factory revenue share for 3Q12. IBM experienced a 7.6% year-over-year decline in factory revenue losing 1.1 points of share in the quarter on soft demand for System z ahead of a recently announced product transition. HP held the number 2 position with 27.3% factory revenue share following an 11.9% year-over-year revenue decline in 3Q12. HP continued to experience declines in HP Integrity server demand combined with relatively weak performance in their x86-based ProLiant server business. Dell maintained third place with 17.1% factory revenue market share in 3Q12. Dell's factory revenue increased 8.2% compared to 3Q11, helping Dell to its highest server market share in any quarter. Oracle maintained the number 4 position with 4.8% factory revenue share; Oracle's 3Q12 factory revenue decreased 23.1% compared to 3Q11. Fujitsu ended the quarter in the number 5 market position with 3.8% factory revenue share following a 22.2% year-over-year decline in server revenue.

Top Server Market Findings

  • Linux server demand continued to be positively impacted by high performance computing (HPC) and cloud infrastructure deployments, as hardware revenue increased 6.6% year over year to $2.6 billion in 3Q12. Linux servers now represent 21.5% of all server revenue, up 2.1 points when compared with the third quarter of 2011.
  • Microsoft Windows server hardware demand was down 0.9% year over year in 3Q12 with quarterly server hardware revenue totaling $6.2 billion representing 51.1% of overall quarterly factory revenue, up 1.6 points over the prior year's quarter. This is the second time in the past three quarters that Windows has been responsible for driving more than half of all server spending worldwide.
  • Unix servers experienced a revenue decline of 14.2% year over year to $2.1 billion representing 17.3% of quarterly server revenue for the quarter, the lowest percentage of server spending in more than 10 years. IBM's Unix server revenue increased by a modest 0.8% year over year; however IBM still managed to gain 7.9 points of Unix server market share when compared with the third quarter of 2011.
  • The market for non-x86 servers, including servers based on RISC, EPIC (Itanium-based), and CISC processors, declined 17.1% year over year to $3.3 billion in 3Q12. This is the fifth consecutive quarter in which non-x86 servers have exhibited a revenue decline. Non-x86 based systems now comprise 27.0% of the server market, the lowest percentage of server spending ever recorded by IDC.

"The Unix server market continued to struggle ahead of year-end refresh cycles," said Kuba Stolarski, research manager, Enterprise Servers at IDC. "IDC expects a short-term easing in the high-end market's decline as technology refreshes, including Intel's Poulson update to its Itanium line, begin to take their course. However, mission critical applications continue to migrate to x86 platforms, placing increasing pressure on the high-end server market."

x86 Industry Standard Server Market Dynamics

Demand for x86 servers continued to improve in 3Q12, with revenues growing 2.0% in the quarter to $8.9 billion worldwide as unit shipments were up 1.5% to 2.1 million servers. HP led the market with 32.0% revenue share based on an 8.7% revenue decline when compared to 3Q11. Dell retained second place, securing 23.4% of revenue share while gaining 1.3 points of share when compared with the third quarter of 2011. IBM rounded out the top three positions, holding 16.5% revenue share following a 4.7% year-over-year revenue decline. Overall, this was the thirteenth time in the previous fourteen quarters with a year-over-year increase in average selling prices for x86 servers as both the mix of systems and average system configurations continue to move up-market, helped in part by the increased focus leading suppliers have on converged infrastructure.

Bladed Server Market Results

The blade market continued its solid growth in the quarter with factory revenue increasing 2.9% year over year and shipment growth declining by 1.1% compared to 3Q11. Overall, bladed servers, including x86, EPIC, and RISC blades, accounted for $2.1 billion in revenues, representing 17.2% of quarterly server market revenue, a record high. More than 91% of all blade revenue is driven by x86-based blades, which now represent 21.5% of all x86 server revenue. HP maintained the number 1 spot in the server blade market in 3Q12 with 45.9% revenue share, while IBM finished with 19.0% revenue share. Cisco and Dell rounded out the top 4 with 15.0% and 8.1% factory revenue share, respectively.

"Modular form factors continue to gain favor with server customers," said Jed Scaramella, research manager, Enterprise Servers at IDC. "Many enterprises are exploring converged systems, which are built on top of blades. These platforms present vendors with the opportunity to increase their customer share of wallet through the attached sale of storage, networking, and services. On the opposite side of the spectrum, large cloud datacenters and service providers value the efficiencies and scalability of density optimized servers. Together these two form factors account for 22.9% of server revenue, gaining 3.3 points from a year ago."

Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, Third Quarter of 2012

(Revenues are in $ Millions)

                   
Vendor

3Q12
Revenue

3Q12 Market
Share

3Q11
Revenue

3Q11 Market
Share

3Q12/3Q11
Revenue
Growth

1. IBM $3,502 28.7% $3,789 29.8% -7.6%
2. HP $3,339 27.3% $3,792 29.8% -11.9%
3. Dell $2,086 17.1% $1,929 15.2% 8.2%
4. Oracle $588 4.8% $764 6.0% -23.1%
5. Fujitsu $465 3.8% $598 4.7% -22.2%
Others $2,238 18.3% $1,854 14.6% 20.7%
All Vendors $12,219 100% $12,727 100% -4.0%

Source: IDC Worldwide Quarterly Server Tracker, November 2012.

In addition to the table above, a graphic showing the relative market shares of the top 5 server vendors for 3Q12 and 3Q11 is available at IDC.com. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

IDC's Server Taxonomy

IDC's Server Taxonomy maps the eleven price bands within the server market into three price ranges: volume servers, midrange servers and high-end servers. The revenue data presented in this release is stated as factory revenue for a server system. IDC presents data in factory revenue to determine market share position. Factory revenue represents those dollars recognized by multi-user system and server vendors for ISS and upgrade units sold through direct and indirect channels and includes the following embedded server components: Frame or cabinet and all cables, processors, memory, communications boards, operating system software, other bundled software and initial internal and external disk shipments.

IDC's Worldwide Quarterly Server Tracker is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly shipments (both ISS and upgrades) and revenues (both customer and factory), segmented by vendor, family, model, region, operating system, price band, CPU type, and architecture. For more information, please contact Lidice Fernandez at 305-351-3051 or [email protected].

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 48 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of their respective holders.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
IoT generates lots of temporal data. But how do you unlock its value? You need to discover patterns that are repeatable in vast quantities of data, understand their meaning, and implement scalable monitoring across multiple data streams in order to monetize the discoveries and insights. Motif discovery and deep learning platforms are emerging to visualize sensor data, to search for patterns and to build application that can monitor real time streams efficiently. In his session at @ThingsExpo, ...
Verizon Communications Inc. (NYSE, Nasdaq: VZ) and Yahoo! Inc. (Nasdaq: YHOO) have entered into a definitive agreement under which Verizon will acquire Yahoo's operating business for approximately $4.83 billion in cash, subject to customary closing adjustments. Yahoo informs, connects and entertains a global audience of more than 1 billion monthly active users** -- including 600 million monthly active mobile users*** through its search, communications and digital content products. Yahoo also co...
"There's a growing demand from users for things to be faster. When you think about all the transactions or interactions users will have with your product and everything that is between those transactions and interactions - what drives us at Catchpoint Systems is the idea to measure that and to analyze it," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York Ci...
"Tintri was started in 2008 with the express purpose of building a storage appliance that is ideal for virtualized environments. We support a lot of different hypervisor platforms from VMware to OpenStack to Hyper-V," explained Dan Florea, Director of Product Management at Tintri, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
The best-practices for building IoT applications with Go Code that attendees can use to build their own IoT applications. In his session at @ThingsExpo, Indraneel Mitra, Senior Solutions Architect & Technology Evangelist at Cognizant, provided valuable information and resources for both novice and experienced developers on how to get started with IoT and Golang in a day. He also provided information on how to use Intel Arduino Kit, Go Robotics API and AWS IoT stack to build an application tha...
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
Large scale deployments present unique planning challenges, system commissioning hurdles between IT and OT and demand careful system hand-off orchestration. In his session at @ThingsExpo, Jeff Smith, Senior Director and a founding member of Incenergy, will discuss some of the key tactics to ensure delivery success based on his experience of the last two years deploying Industrial IoT systems across four continents.
There will be new vendors providing applications, middleware, and connected devices to support the thriving IoT ecosystem. This essentially means that electronic device manufacturers will also be in the software business. Many will be new to building embedded software or robust software. This creates an increased importance on software quality, particularly within the Industrial Internet of Things where business-critical applications are becoming dependent on products controlled by software. Qua...
SYS-CON Events has announced today that Roger Strukhoff has been named conference chair of Cloud Expo and @ThingsExpo 2016 Silicon Valley. The 19th Cloud Expo and 6th @ThingsExpo will take place on November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. "The Internet of Things brings trillions of dollars of opportunity to developers and enterprise IT, no matter how you measure it," stated Roger Strukhoff. "More importantly, it leverages the power of devices and the Interne...
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
In addition to all the benefits, IoT is also bringing new kind of customer experience challenges - cars that unlock themselves, thermostats turning houses into saunas and baby video monitors broadcasting over the internet. This list can only increase because while IoT services should be intuitive and simple to use, the delivery ecosystem is a myriad of potential problems as IoT explodes complexity. So finding a performance issue is like finding the proverbial needle in the haystack.
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develo...
SYS-CON Events announced today that MangoApps will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. MangoApps provides modern company intranets and team collaboration software, allowing workers to stay connected and productive from anywhere in the world and from any device.
Basho Technologies has announced the latest release of Basho Riak TS, version 1.3. Riak TS is an enterprise-grade NoSQL database optimized for Internet of Things (IoT). The open source version enables developers to download the software for free and use it in production as well as make contributions to the code and develop applications around Riak TS. Enhancements to Riak TS make it quick, easy and cost-effective to spin up an instance to test new ideas and build IoT applications. In addition to...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
"We've discovered that after shows 80% if leads that people get, 80% of the conversations end up on the show floor, meaning people forget about it, people forget who they talk to, people forget that there are actual business opportunities to be had here so we try to help out and keep the conversations going," explained Jeff Mesnik, Founder and President of ContentMX, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.