Worldwide Server Revenue Grew 16 Per cent in the Third Quarter of 2017, According to Gartner, Inc

In the third quarter of 2017, worldwide server revenue increased 16 per cent year over year, while shipments grew 5.1 per cent from the second quarter of 2016, according to Gartner, Inc

Worldwide Server Revenue Grew 16 Per cent in the Third Quarter of 2017, According to Gartner, Inc

“The third quarter of 2017 produced continued growth on a global level with varying regional results,” said Jeffrey Hewitt, research vice president at Gartner. “A build-out of infrastructure to support cloud and hybrid-cloud implementations was the main driver for growth in the server market for the period.”

“x86 servers increased 5.3 per cent in shipments for the year and 16.7 per cent in revenue in the third quarter of 2017. RISC/Itanium Unix servers declined globally, down 23.5 per cent in shipments and 18.3 per cent in vendor revenue compared with the same quarter last year. The ‘other’ CPU category, which is primarily mainframes, showed a decline/increase of 54.5 per cent,” Mr Hewitt said.

Hewlett Packard Enterprise (HPE) continued to lead in the worldwide server market based on revenue. Despite a decline of 3.2 per cent, the company posted $3.1 billion in revenue for a total share of 21 per cent for the third quarter of 2017. Dell EMC maintained the No. 2 position with 37.9 per cent growth and 20.8 per cent market share. Inspur Electronics experienced the highest growth in the quarter with 116.6 per cent, driven by ongoing sales into China-based cloud providers, as well as global expansion efforts.

In server shipments, Dell EMC maintained the No. 1 position in the third quarter of 2017 with 17.8 per cent market share. HPE secured the second spot with 16.4 per cent of the market. Inspur Electronics was the only vendor in the top five to experience positive growth in the quarter.

Europe, the Middle East and Africa (EMEA)

In the third quarter of 2017, server revenue in EMEA totaled $3.1 billion, a 17.1 per cent increase from the third quarter of 2016. Server shipments totaled 495 thousand units, a growth of 2.9 per cent year over year.

“On the surface, the EMEA server market has some positive results at last,” said Adrian O’Connell, research director at Gartner. “However, the increased price of certain components due to supply shortages was the main driver of the revenue growth, as vendors passed increased costs on to users.”

In revenue terms, all of the top five vendors benefited from this growth in the third quarter of 2017. HPE maintained the No. 1 position, but Dell EMC saw particularly strong share growth compared with the third quarter last year. “An expanded customer base from the EMC acquisition continues to benefit the server business in the new Dell EMC organisation,” said Mr. O’Connell.

 HPE is the last of the top four vendors by revenue to still have a non-x86 server business, so it’s been affected more by the fluctuations of that segment. IBM is ranked fifth for server revenue, showing growth after a long period of decline. This indicates that the effects of the System X divestiture are now behind it.

 “Despite revenues in the third quarter looking relatively positive, the low shipment growth shows the EMEA server market remains constrained,” said Mr. O’Connell. “While component shortages will ease, we’re not expecting to see an improvement in the underlying business outlook across the region for some time.”