Worldwide Server Market Revenues Decline 4.8% in Second Quarter as Market Demand Softens, According to IDC
28 Aug 2012
FRAMINGHAM, Mass., August 28, 2012 – According to the
International Data Corporation (IDC) Worldwide Quarterly
factory revenue in the worldwide server market decreased 4.8% year over year to
$12.6 billion in the second quarter of 2012 (2Q12). This is the third consecutive
quarter of year-over-year revenue decline, as server market demand continued to
soften following a strong refresh cycle which characterized the market in most
of 2010 and 2011. Server unit shipments decreased 3.6%
year over year in 2Q12 to 2.0 million units. This was the first
year-over-year decline in server shipments since 3Q09, a period of almost three
On a year-over-year
basis, volume systems experienced a 2.5% revenue decline. At the same time,
demand for midrange and high-end systems experienced year-over-year revenue
declines of 11.2% and 7.6% respectively in 2Q12. All three segments were
impacted by difficult year-over-year compares combined with transitions in the
technology refresh cycles.
server revenue declined for the third consecutive quarter in 2Q12 as the market
continued working its way through a number of technology transitions impacting
customer demand for x86, Unix, and mainframe class systems. That said, it is
also clear that economic uncertainty is weighing on the market and the sales
cycle is lengthening," said Matt Eastwood, group vice
president and general manager, Enterprise Platforms at IDC. "Regionally,
server demand in Western Europe and Japan was particularly soft while server
revenue in the U.S. and Asia/Pacific managed to grow modestly. It is important
to note that IDC believes that server demand will begin to improve in the
second half of 2012 following a number of critical product refreshes which
continue to be announced."
Overall Server Market Standings, by Vendor
HP and IBM jointly held
the number 1 position in the worldwide server market with 29.6% and 29.2%
factory revenue share respectively for 2Q12, a statistical tie*. IBM
experienced a 8.2% year-over-year decline in factory revenue losing 1.1 points
of share in the quarter on soft demand for System x, Power Systems, and System
z ahead of a number of major product transitions. HP's factory revenue declined
5.0% year over year in 2Q12 based on flat sales for x86-based ProLiant servers
offset by continued declines in HP Integrity server demand. Dell maintained
third place with 16.0% factory revenue market share in 2Q12. Dell's factory
revenue increased 5.9% compared to 2Q11 helping Dell to its highest-ever server
market share in any quarter. Oracle maintained the number 4 position with 6.0%
factory revenue share; Oracle's 2Q12 factory revenue decreased 20.1% compared
to 2Q11. Fujitsu ended the quarter in the number 5 market position with 3.9%
factory revenue share. Facing a tough yearly compare from the K-computer HPC
deal in 2Q11, Fujitsu server revenue declined 42.1% year over year.
Top Server Market Findings
server demand continued to be positively impacted by high performance computing
(HPC) and cloud infrastructure deployments, as hardware revenue increased at 1.7%
year over year to $2.8 billion in 2Q12. Linux servers now represent 22.1% of
all server revenue, up 1.4 points when compared with the second quarter of
Windows server demand was up 0.3% year over year in 2Q12 with quarterly server
hardware revenue totaling $6.0 billion representing 47.9% of overall quarterly
factory revenue, up 2.4 points over the prior year's quarter.
servers experienced a revenue decline of 20.3% year over year to $2.3 billion
representing 18.4% of quarterly server revenue for the quarter. IBM's Unix
server revenue declined 10.0% year over year; however IBM still managed to gain
6.1 points of Unix server market share when compared with the second quarter of
market for non-x86 servers, including servers based on RISC, EPIC
(Itanium-based), and CISC processors, declined 19.4% year over year to $3.9
billion in 2Q12. This is the fourth consecutive quarter in which non-x86
servers have exhibited a revenue decline. Non-x86 based systems now comprise 30.6%
of the server market.
"The Unix server
market is in between generation refresh cycles, and continues to be hampered by
workload consolidation and migration to other platforms," said Kuba Stolarski, research manager, Enterprise Servers at IDC. "IDC
expects the Unix market to stabilize over the next few years and remain a
smaller, specialized segment of the overall server market, catering primarily
to customers who are looking for high levels of availability and stability in a
x86 Industry Standard Server Market Dynamics
Demand for x86
servers continued to improve in 2Q12, with revenues growing 3.5% in the quarter
to $8.7 billion worldwide as unit shipments were down 0.6% to 1.9 million
servers. This was the first decline in x86 server shipments since 3Q09. HP led
the market with 36.4% revenue share based on a 0.2% revenue decline when
compared to 2Q11. Dell retained second place, securing 23.1% of revenue share
while gaining 0.5 points of share when compared with the second quarter of 2011.
IBM rounded out the top three positions, holding 14.3% revenue share following
a 7.4% year-over-year revenue decline. Overall, this was the twelfth time in
the previous thirteen quarters with a year-over-year increase in average
selling prices for x86 servers as both the mix of systems and average system
configurations continue to move up-market, driving generally higher product
margin for x86 ecosystem players.
Bladed Server Market Results
The blade market
continued its solid growth in the quarter with factory revenue increasing 6.3%
year over year and shipment growth increasing by 4.1% compared to 2Q11.
Overall, bladed servers, including x86, EPIC, and RISC blades, accounted for $2.1
billion in revenues, representing 16.9% of quarterly server market revenue, a
record high. More than 90% of all blade revenue is driven by x86-based blades,
which now represent 22.1% of all x86 server revenue. HP maintained the number 1
spot in the server blade market in 2Q12 with51.5% revenue share, while
IBM finished with 15.9% revenue share. Cisco and Dell rounded out the top 4
with 13.8% and 8.1% factory revenue share, respectively.
observing a increasing trend towards form factor specialization in the market,
as both blade and density optimized servers continue to outperform the general
market," said Jed Scaramella, research manager, Enterprise Servers at IDC.
"Together, blade and density optimized servers grew 15% in annual revenue
and now represent 22% of the market. These modular form factors are expected to
continue to gain adoption, with blades targeting virtualized environments in
enterprises and density optimized servers targeting large-scale homogeneous
environments in datacenters."
Top 5 Corporate
Family, Worldwide Server Systems Factory Revenue, Second Quarter of 2012
(Revenues are in Millions)
Source: IDC Worldwide Quarterly
Server Tracker, August 2012.
* Note: IDC declares a statistical tie in the worldwide server market when there
is less than one percent difference in the revenue share of two or more
Chart: Total WW Server Market, 2Q 2012 Vendor Market Share (Factory Revenue) Description: Source: IDC Worldwide Quarterly Server Tracker, August 28, 2012
Note: IDC's Worldwide Quarterly Server Tracker provides, in over 70 countries, quarterly market size and vendor shipments by units, factory revenue, and customer revenue for more than 20 server segmentations including OS, price band, server class, CPU type, form factor, U-rating, processor brand, socket capability, core count, and more. Forecast data is provided by CPU, form factor, socket capability, OS, and price band.
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Tags: IDC, Tracker, Server, Servers, IBM, HP, Dell, Fujitsu, Oracle, Vendor, Vendors, Market Share, 2Q2012,Author: IDCcharts powered by iCharts
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IDC's Server Taxonomy
IDC's Server Taxonomy
maps the eleven price bands within the server market into three price ranges:
volume servers, midrange servers and high-end servers. The revenue data
presented in this release is stated as factory revenue for a server system. IDC
presents data in factory revenue to determine market share position. Factory
revenue represents those dollars recognized by multi-user system and server
vendors for ISS and upgrade units sold through direct and indirect channels and
includes the following embedded server components: Frame or cabinet and all
cables, processors, memory, communications boards, operating system software,
other bundled software and initial internal and external disk shipments.
Quarterly Server Tracker is a quantitative tool for analyzing the global server
market on a quarterly basis. The Tracker includes quarterly shipments (both ISS
and upgrades) and revenues (both customer and factory), segmented by vendor,
family, model, region, operating system, price band, CPU type, and
architecture. For more information, please contact Hoang Nguyen at 508-935-4718
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