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13 Mar 2017

4Q16 EMEA Server Spending Declines by 12.9% YoY, According to IDC

FRANKFURT, March 13, 2017 — International Data Corporation's (IDC) EMEA Server Tracker shows that in the fourth quarter of 2016 the EMEA server market reported a year-on-year (YoY) decline in vendor revenues of 12.9% to $3.4 billion and a YoY decrease of 4.7% in units shipped to just under 600,000. Looking at the EMEA market in euros, reported revenues in 4Q16 declined 11.7% YoY. The top 5 vendors in EMEA and their revenues for the quarter are displayed in the table below.

Top 5 EMEA Vendor Revenues ($M)

Vendor

4Q15 Server Revenue

4Q15 Market Share

4Q16 Server Revenue

4Q16 Market Share

4Q15/4Q16 Revenue Growth

HPE

1,314.2

33.5%

1,158.4

33.9%

-11.9%

Dell

661.7

16.9%

608.0

17.8%

-8.1%

IBM

603.5

15.4%

400.1

11.7%

-33.7%

Lenovo

299.4

7.6%

242.9

7.1%

-18.9%

Cisco

203.4

5.2%

209.0

6.1%

2.8%

Others

843.9

21.5%

799.9

23.4%

-5.2%

Total

3,926.1

100.0%

3,418.4

100.0%

-12.9%

Source: IDC Quarterly Server Tracker, 4Q16

When viewing the EMEA market by product, the biggest decline was seen in custom rack optimized server units and revenues, which decreased 38.1% and 39.9% respectively. Although relatively unchanged YoY, standard rack optimized servers recorded the highest overall shipment numbers (294,000), while large system servers saw the highest YoY shipment increase of 21.9% to 1,706 units.

"The ODM market continues to show strength as it gains another percentage point share in Western Europe in 4Q16. This continued growth from the ODM market is indicative of the continued drive toward cloud, be it through well-established tier 1 providers, smaller service providers, or the hoster community in Western Europe," said Eckhardt Fischer, senior research analyst, European Infrastructure, IDC.

An interactive graphic with this product breakdown is available here.

Regional Highlights

In terms of vendors, with 33.9% market share HPE remained at the top of the Western European server market, while second place Dell increased market share year on year from 16.9% to 17.8% in 4Q16.

"An overall revenue decline in the 4Q16 Western European server market was fueled by mild earnings decreases across most major vendors. In particular, revenue for IBM declined by 33.7%, due in part to non-x86 refresh cycles and the continuing trend of declining non-x86 shipments," said Michael Ceroici, research analyst, European Infrastructure, IDC.

Finland, Ireland, and the Netherlands were the worst performers in the fourth quarter, with YoY revenue declines between 25% to 35% as both pressure from ODMs and slowed purchasing cycles from major service providers continue to create a turbulent market environment. With 20.5% YoY revenue growth Italy outperformed its neighbors, while Switzerland saw an increase of 30.3% in shipments due to some large investments in the high performance computing market, such as the expansion of the Swiss National Supercomputing Centre.

"Central and Eastern Europe, the Middle East, and Africa [CEMA] server revenue declined by 16.8% year over year to $730.63 million in 4Q16. A limited number of infrastructure projects in the public space as well as the declining installed base of non-x86 servers were the major inhibitors in the last quarter of the year," said Jiri Helebrand, research manager, IDC CEMA. "The Central and Eastern Europe [CEE] subregion declined by 25.0% year over year with revenue of $351.53 million due to the lack of demand in the public sector in Poland and Czech Republic, and a substantial reduction of non-x86 server sales in Russia. Pockets of demand were recorded among the service providers that continue to invest in off-premise infrastructure buildouts."

Helebrand said the Middle East and Africa (MEA) subregion declined by 7.5% year over year to $379.10 million and fared much better than the CEE and Western European regions. "The delivery of an HPC project in the oil and gas industry as well as demand from the telecommunication and banking sectors drove demand for HW in the MEA region. Israel was among the best performing countries, driven by sales to the public sector and service providers. Qatar and Kuwait also recorded strong double-digit growth, benefiting from demand in the finance sector," Helebrand said.

Taxonomy Changes

Modular server category: Server form factors have been amended to include the new "modular" category that encompasses today's blade servers and density-optimized servers (which are being renamed multinode servers). As the differentiation between these two types of servers continues to become blurred, IDC is moving forward with the "modular server" category as it better reflects the directions in which vendors and the entire market are moving when it comes to server design.

Multinode (density-optimized) servers: Modular platforms that do not meet IDC's definition of a blade are classified as multinode. This was formerly called density optimized in IDC's server research and server-related tracker products.

Link to product sheet for the tracker:

http://www.idc.com/tracker/showproductinfo.jsp?prod_id=7

For More Information, please contact:

Eckhardt Fischer

efischer@idc.com

+496990502111

Coverage
Contact
For more information, contact:

Eckhardt Fischer
efischer@idc.com
+ 49 69-90502-0