According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, vendor revenue in the worldwide server market increased 5,1% year over year to $13,4-billion in the third quarter of 2015 (3Q15), the sixth consecutive quarter of year-over-year revenue growth.
During this quarter, revenue grew in rack optimised, blade, and density-optimised servers, while towers declined. Worldwide server shipments totalled 2,49-million units in 3Q15, an increase of 4,5% when compared with the third quarter of 2014.
On a year-over-year basis, volume system revenue increased by 7% and high-end system demand increased by 1,2% in 3Q15 to $10,8-billion and $1,4-billion, respectively.
The volume segment was aided by a continued expansion of x86-based hyper-scale data centres coupled with enterprise and SMB refresh of x86-based platforms, while high-end systems were helped by IBM’s z13 refresh, which began in 1Q15 and has since been decelerating.
Meanwhile, 3Q15 demand for midrange systems contracted by -5,8% year over year to $1,2-billion, as the x86 refresh appears to have run its course in this segment.
“As the server market nears the end of 2015 with continued growth, fears of depleted IT budgets from an early run on servers have failed to materialize,” says Kuba Stolarski, research director: servers and emerging technologies at IDC. “At the same time, that perfect storm in the first quarter could not have been expected to continue through the end of the year, as the effects of the cyclical enterprise refresh, Windows Server 2003 end of support, and Grantley platform refreshes all come to an end.
“Looking forward, IDC sees modest opportunities for short term market growth related to the upcoming Microsoft SQL Server 2005 end of support on 16 April 2016; we estimate approximately 800 000 servers globally still running SQL Server 2005. In the longer term, IDC expects server market growth to be driven by software-defined, disaggregated systems and network edge-deployed Internet of Things (IoT) compute.”
HP captured worldwide unit market share of 27,5% in 3Q15 on 9% year-over-year revenue growth to $3,7-billion. HP’s revenue growth was primarily driven by strong demand for its density-optimised servers, which grew 37,2% year over year, and its rack optimised servers, which grew at 14,2% year over year but still managed to contribute a larger portion to HP’s overall revenue growth.
Dell showed year-over-year revenue growth of 7,3% and its $2,4-billion placed the company in the number two position with 18,1% market share this quarter. Dell benefited from revenue growth in its blade and rack-optimized products. Dell’s blade server revenue grew faster than that of any of the top five vendors at 34,8%, excepting Lenovo’s acquisition of IBM’s x86 server business.
IBM retained its number three position following its x86 divestiture with $1,3-billion in revenue and 9,6% market share. IBM’s revenues are now associated with its Power and System Z product lines.
Lenovo finished the quarter in the number four position with 7,8% worldwide market share on $1,1-billion in 3Q15 revenues. Cisco was in fifth place with $886-million in revenue and 6,6% revenue market share. Cisco’s year-over-year growth of 12,7% continues to be above average for the industry, suggesting that the company is not done capturing incremental market share in the server market. Cisco’s blade business also continued to grow well, with Cisco’s blade revenue second only to HP in 3Q15.