The worldwide server market continued to grow through 2018 as worldwide server revenue increased 17,8% in the fourth quarter of 2018, while shipments grew 8,5% year over year, according to Gartner.
In all of 2018, worldwide server shipments grew 13,1% and server revenue increased 30,1% compared with full-year 2017.
“Hyperscale and service providers continued to increase their investments in their data centres (albeit at lower levels than at the start of 2017) to meet customers’ rising service demand, as well as enterprises’ services purchases from cloud providers,” says Kiyomi Yamada, senior principal analyst at Gartner. “To exploit data centre infrastructure market disruption, technology product managers for server providers should prepare for continued increases in server demand through 2019, although growth will be a slower pace than in 2018.
“DRAM prices started to come down, increasing demand for memory-rich configurations to support emerging workloads such as artificial intelligence (AI) and analytics kept buoying server prices. Product managers should market higher memory content servers to take advantage of DRAM oversupplies.”
Dell EMC secured the top spot in the worldwide server market based on revenue in the fourth quarter of 2018. Dell EMC ended the year with 20,2% market share, followed by Hewlett Packard Enterprise (HPE) with 17,7% of the market. Huawei experienced the strongest growth in the quarter, growing 45,9%.
In server shipments, Dell EMC maintained the number one position in the fourth quarter of 2018 with 16,7% market share. HPE secured the second spot with 12,2% of the market. Both Dell EMC and HPE experienced declines in server shipments, while Inspur Electronics experienced the strongest growth with a 24,6% increase in shipments in the fourth quarter of 2018.
The x86 server market increased in revenue by 27,1%, and shipments were up 8,7% in the fourth quarter of 2018.
Full-year 2018 server market results
In terms of regional results, in 2018, Asia/Pacific and North America posted strong growth in revenue with 38,3% and 34%, respectively. In terms of shipments, Asia/Pacific grew 17,6% and North America grew 15,9% year over year.
EMEA grew 3,1% in shipments and 20,4% in revenue. Latin America grew 20,9% in revenue, but declined 4,4% in shipments. Japan grew 3,3% in revenue, 2,1% in shipments.
EMEA server market results in the fourth quarter of 2018 and full year
In the fourth quarter of 2018, server revenue in EMEA totalled more than $4,4-billion, growing 12,3% from the fourth quarter of 2017. Server shipments totalled 586 000 units, a growth of 6,6% year over year.
“The EMEA market ended the fourth quarter, and the overall year, positively with both good shipment and good revenue growth,” says Adrian O’Connell, senior research director at Gartner. “Although these levels of growth were positive, a large part of the revenue increase was due to higher component costs — which lead to higher system prices. It’s also important to recognise that total shipments were lower in 2018 than they had been in 2016.”
In revenue terms, all of the top five vendors except IBM grew in the fourth quarter of 2018. HPE retained the number one position and increased its revenue share. Second-ranked Dell EMC saw the strongest growth from the fourth quarter of 2017, but third-ranked IBM experienced a revenue decline.
“EMEA continues to be a strong region for HPE, and the EMC acquisition continues to drive very good server revenue growth for Dell EMC, but the cyclical nature of the high-end server business is currently hampering IBM,” says O’Connell.
As in the rest of 2018, while the revenue results are positive, the moderate shipments — which continue to be lower than in previous years — indicate a relatively weak underlying demand across the EMEA market.
“The price increase due to higher component costs will ease as we go through 2019,” says O’Connell. “Key component supply levels have already significantly eased and we expect this to be passed on to the users in the form of lower server prices as we go through 2019. So, the outlook for revenue will certainly be weaker than in 2018, and the relatively weak level of underlying demand across EMEA also looks set to continue.”