In the second quarter of 2016 the EMEA server market reported a moderate year-on-year (YoY) decline in vendor revenues of 3.7% to $3-billion and a slight YoY increase of 0.8% in units shipped to just over 530 000, according to IDC’s EMEA Server Tracker.
Looking at the EMEA market in euros, reported YoY revenues in 2Q16 declined by 5.7%. Currency instability may continue to play a role in pound- and euro-denominated revenues, as the long-term impact of Brexit on Western European IT markets remains to be seen.
The EMEA non-x86 market showed further negative signals in 2Q16. Vendor revenue was down 29.3% YoY in the quarter, reaching just over $400-million, as CISC, EPIC, and traditional RISC machines all showed double-digit declines.
In consideration of product detail, standard density optimised server units and revenues decreased by 34.8% and 44.4% respectively. Custom density optimised servers continue to outperform other models, with shipments increasing 51.9% in 2Q16 and revenues increasing by 22.8%.
“This is strongly driven by the continued expansion of original design manufacturers (ODMs) in EMEA, a trend that IDC predicts will continue as mega data centres and larger enterprises begin to source their hardware directly,” says Eckhardt Fischer, research analyst, European Infrastructure, IDC.
Regional Highlights
“The tempered performance of the 2Q16 Western European server market was party fuelled by a significant revenue decrease for IBM (-36.9%), due in large part to the refresh cycle of legacy mainframe units in the second quarter of 2015. As the largest player in the non-x86 segment (68.9% of 2Q16 EMEA revenues), the drop had a noticeable impact on overall units and revenue for the quarter,” says Michael Ceroici, research analyst, European Infrastructure, IDC. At the top of the vendor list, HPE maintained its position as market leader in Western Europe with 35.3% market share. A noteworthy category was Others, comprising tier 2 and ODM vendors, which increased in market share in Western Europe from 21.3% to 24.5%.
“Central and Eastern Europe, the Middle East, and Africa (CEMA) server revenue declined for the fifth consecutive quarter, falling by 5.5% to $607-million in 2Q16. A slowdown in the non-x86 product line after a major refresh a year ago and a limited number of large deals in the region weighed negatively on server sales. The Central and Eastern Europe (CEE) sub-region declined by 1.3% YoY with revenues of $264-million. Russia and Ukraine recorded strong growth as the region’s geopolitical situation stabilised and IT infrastructure investments resumed. The Middle East and Africa (MEA) sub-region declined by 8.5% YoY to $343-million, as IT projects continued to be scaled back due to an unfavourable economic situation impacted by low oil prices. Turkey outperformed strongly, recording double-digit growth driven by demand for converged infrastructure in telecom and finance verticals,” says Jiri Helebrand, research manager, IDC CEMA.