EMEA x86 Server Spending Gets Hit Out of the Park by Hyperscale Datacenters in 4Q14, While non-x86 Fights its Way Off the Bench, says IDC.
22 Mar 2016
LONDON March 22, 2016 - As reported in International Data Corporation's (IDC) EMEA Server Tracker, in the 4th quarter of 2015 the EMEA server market continued to show moderate growth, reporting $3.9 billion in vendor revenue and 625,000 units shipped, for year-on-year growth of 5.0% and -1.6% respectively.
For the full year 2015, vendor revenue was $13.2 billion and 2.6 million server units were shipped, with growth on 2014 of 3.0% and 0.1% respectively. This trend can be attributed to two main drivers — the weakening dollar that forced average selling prices (ASPs) in local currency higher over the course of 2015, and the continued movement towards richer configurations for compute-intensive workloads.
The prior influencer is prominent when looking at the market in euros; in 4Q15 EMEA reported a slightly improved quarter, with a YoY revenue decline of 7.9%, which was a major improvement when comparing a full year view of 2015 against 2014, when EMEA saw a decrease in vendor revenue of 13.7%. 2015 also saw EMEA report flat unit shipments, a slowdown that can be attributed to the rise in ASPs by U.S.-based vendors earlier this year, as a means of stabilizing dollar revenues in a challenging economic situation. IDC believes that if U.S.-based vendors continue to increase local currency prices, the market might start to see more interest in Asian vendors including ODMs.
The EMEA non-x86 market showed positive growth in 4Q15 when compared to 3Q15, as revenue was up 17.9%, reaching $780 million and driven strongly by CISC machines, which showed double-digit growth (57.6%).
"This growth was pushed by longer refresh cycles, some dating back to 2014, and although this has driven the non-x86 market in 4Q15, larger vendors that play in this market are still seeing a notable decline in annual refresh cycles, a trend that IDC believes will continue into the foreseeable future," said Giorgio Nebuloni EMEA associate research director, European Infrastructure.
“The x86 market in EMEA has started to see some normalization since the currency impact started to ease, leading to moderate 2.2% growth YoY in vendor revenue, reaching a new record of $3.1 billion, said Andreas Olah, senior research analyst, European Infrastructure. "A large share of this revenue growth has been generated by the construction of new hyperscale datacenters by several global cloud service providers. In addition, the growing hunger for more powerful, mission-critical machines with large memory pools has fueled further ASP increases, especially on the blade side.".
“The strong performance of the x86 server market in Western European this quarter (6.0% YoY) found a lot of impetus from the larger systems product segment, which saw YoY vendor revenue growth of 39.1%, driven strongly by an increasing adoption of Big Data and IoT, which have a thirst for high-availability solutions," said Eckhardt Fischer, research analyst, European Infrastructure at IDC. Besides the larger systems market, Western Europe also saw the x86 density optimized segment break the $300 million vendor revenue mark, for YoY growth of 30.2%. A huge achievement as more and more of the enterprise market finds its way to the cloud, driving the buildout of the larger datacenters.
“Central and Eastern Europe, the Middle East, and Africa (CEMA) server revenue continued to decline in the last quarter of 2015," said Jiri Helebrand, research manager, IDC CEMA. "Indeed, revenue fell by 5.5% to $891.83 million on the back of weaker demand for x86 servers. In contrast, non-x86 sales recorded 10.8% year-over-year growth driven by IBM z Systems refresh cycle. The Central and Eastern Europe (CEE) subregion declined 4.6% year-over-year, with revenue of $475.59 million. The Russian market continued to underperform, while Poland, the Czech Republic, and Romania observed double-digit growth thanks to improving economic conditions and delivery of HPC deals. The Middle East and Africa (MEA) subregion declined 6.5% year-over-year to $416.24 million as IT projects were scaled backed due to the unfavorable economic situation impacted by falling oil prices. Despite the negative business sentiment in the region, Turkey recorded double-digit growth driven by demand from telecommunications and finance verticals.”.
TOP 5 VENDOR REVENUE TABLE
4Q14 Server Revenue (M$)
4Q14 Vendor Revenue Market Share
4Q15 Server Revenue (M$)
4Q15 Vendor Revenue Market Share
4Q14/4Q15 Revenue Growth
Hewlett Packard Enterprise
The introduction of product detail allows for an additional view on the density optimized and rack optimized markets. Segmenting them into custom and standard systems. Where custom servers have a motherboard or case enclosure that is:
- Designed and built specifically for or by one customer, for that customer's sole use (e.g., Google, Dell DCS, HP/Foxconn), or
- Designed as part of an open source design forum (Facebook servers, Microsoft Open Compute Server). (Note: Membership in an open source forum does not equate to building custom servers. A vendor can build custom and non-custom servers, whether or not that vendor is an open source participant.)
- Models: custom models will be labeled as "Other".
IDC has included large system as a new product alongside blades, density optimized, tower and rack optimized. These systems are made up of multiple rack-mounted components, including motherboards, processors, memory, disk storage, and any bundled operating system, database, and networking software with the following characteristics:
- Sold exclusively as a system by the vendor.
- Integrated systems will not be included by default, although some integrated systems may fit this definition and therefore be included, for example:
o System Z
o Unisys ClearPath
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.
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