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Server Market Continues Modest Growth Trend

PC sales growth may be on the downward spiral but expenditures on servers continue to rise, albeit at a single-digit rate. The latest quarterly reports from Gartner and IDC show revenues for servers increased 7.2 percent and 6.1 percent respectively in the second quarter of 2015.

While Gartner and IDC have somewhat different methodologies, both show continued demand for servers. That may surprise some cloud computing purists who wonder why anyone would buy a server. For sure many of these sales are shifting to cloud providers and MSPs but many build their own systems.

Most of the $13 billion that Gartner and IDC reports was spent on servers in the last three months went to the key players: HP, Dell, IBM, Lenovo and Cisco. It marks the fifth consecutive quarter of year-over-year revenue growth, IDC said.

"The recent growth trend in the server market is confirmation of the larger IT investment taking place, despite dramatic change occurring in system software thanks to open source projects such as Docker and OpenStack," said Al Gillen, IDC's program VP of servers and systems software, in a statement. "While we do anticipate an impact on product mix and potentially on volumes, it is too early in the adoption cycle for these new software products to have a material impact on servers today. In the meantime, the market demonstrated healthy revenue and shipment growth this quarter."

Much of the growth is coming from demand for x86-based hyper-scale systems as well as refreshes of servers among small and medium businesses, likely an outgrowth of Windows Server 2003's end of support. Microsoft issued its last patch for Windows Server 2003 in April. Refreshes of IBM mainframes helped growth on the high end, though mid-range systems declined 5.4 percent, according to IDC.

In terms of shipments, HP remains the leader with 21.7 percent of the market, posting 2.5 percent growth while No. 2 Dell at 18 percent saw a slight decline (0.4 percent), according to Gartner. Though a distant No. 3, Lenovo, which recently acquired IBM's x86 server business, saw volume growth of 185.7 percent year over year. Both researchers said Lenovo saw 500-plus percent revenue growth, although obviously both increases were aided by picking up IBM's commodity server line.

 

Posted by Jeffrey Schwartz on 08/26/2015 at 12:19 PM


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