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Worldwide Server Shipments Decline: US Market Strong (what does that tell you?)

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Gartner just released their overview of the worldwide server market reporting that worldwide server shipments declined a surprising .7 percent year on year, while revenue declined 5 percent from the first quarter of 2012. Their report is available here. Key points:

“The first quarter of 2013 was certainly not a strong period for the server market on a global level,” said Jeffrey Hewitt, research vice president at Gartner. “The only regions to post increases were Asia/Pacific and the United States, with Asia/Pacific showing the strongest growth with shipment and revenue increases of 7 percent and 1.7 percent, respectively. While these two regions grew in both shipments and revenue, it was not enough to offset the declines of the other geographies–all of which declined in server shipments and revenue for the quarter.”

“x86 server shipment growth was flat in the quarter, while revenue increased 1.8 percent. RISC/Itanium Unix servers declined globally for the period, down 38.8 percent in shipments and down 35.8 percent in vendor revenue compared to the same quarter last year. The ‘other’ CPU category, which is primarily mainframes, exhibited an increase of 3.6 percent in worldwide revenue.”

IBM and HP are the leaders of the worldwide server market based on revenue, both bringing in about 25 percent of the market share. Dell is third with about 18 percent of the market share.  Although Dell is third, they are the only player to be growing revenue. Their revenue is up 14 percent.

When measured by actual server shipments, HP dominates, followed by Dell and IBM.

Why are server sales feeling so much pressure globally?

First, consider the state of PC sales captured here. There are some big trends at play.

Key trends are the move we have all been watching towards more cloud based services. At first that may seem counter intuitive, since servers make the cloud work. But clouds are more efficient causing significant downward pressure. And most cloud capabilities are coming from the US which may explain why the server market is still ok in this region.

Virtualization has also been a component long known to be flattening server sales.

Overall this great Gartner reporting all underscores the trends we have been tracking and reporting on for the last several years. This will motivate and inform the next update to our brief on the Future of IT. This brief tracks and reports on the five megatrends of:

  • User Empowerment and Consumerization
  • Convergence and trend towards Unified Communications and Common Platforms
  • Cloud Computing (Utility, Data and Storage)
  • Managing Large Data To Enhance Sensemaking
  • Security In The Face Of An Increasing Pace of Technology Development (and probability of disruption)

More on each of these and what they mean for you are available at the research end of our web presence, CTOlabs.com

Read the original blog entry...

More Stories By Bob Gourley

Bob Gourley writes on enterprise IT. He is a founder of Crucial Point and publisher of CTOvision.com

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