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05 Sep 2018

Worldwide Server Market Revenue Grew 43.7% Year Over Year to a Record $22.5 Billion During the Second Quarter of 2018, According to IDC

FRAMINGHAM, Mass., September 5, 2018 – According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, vendor revenue in the worldwide server market increased 43.7%, year over year to $22.5 billion during the second quarter of 2018 (2Q18). Worldwide server shipments increased 20.5% year over year to 2.9 million units in 2Q18.

The overall server market continues to experience historic demand with 2Q18 marking the fourth consecutive quarter of double digit revenue growth and its highest total revenue ever. Volume server revenue increased by 42.7% to $18.4 billion, while midrange server revenue grew 63.0% to $2.5 billion. High-end systems grew 30.4% to $1.7 billion.

"The worldwide server market continues to flourish amid a market-wide enterprise refresh cycle and increasing demand from cloud service providers," said Sanjay Medvitz, senior research analyst, Servers and Storage at IDC. "Enterprises continue to invest in new infrastructure to support next-generation applications and achieve cloud-like benefits on premise. Hyperscalers also continue to update and expand their datacenter presence, benefiting ODM Direct suppliers. Server revenue growth has also been driven by increasing average selling prices (ASPs). This is due to richer configurations, DRAM prices, and new processor platforms."

Overall Server Market Standings, by Company

Dell Inc. achieved the number one position in the worldwide server market for the first time in 2Q18 with 18.8% revenue share and 52.9% growth. HPE/New H3C Group was the second largest supplier with 16.6% share of total vendor revenue, growing 11.7%. IBM and Lenovo were statistically tied* for third position in the market with respective shares of 7.3% and 6.9%. Inspur, Cisco, and Huawei rounded out the top five, all statistically tied* with 4.8%, 4.8%, and 4.3% respective shares of vendor revenue. The ODM Direct group of vendors increased its collective revenue by 55.9% (year over year) to $5.5 billion. Dell Inc. led the worldwide server market in terms of unit shipments, accounting for 19.5% of all units shipped during the quarter.

Top 5 Companies, Worldwide Server Vendor Revenue, Market Share, and Growth, Second Quarter of 2018 (Revenues are in US$ Millions)

Company

2Q18 Revenue

2Q18 Market Share

2Q17 Revenue

2Q17 Market Share

2Q18/2Q17 Revenue Growth

1. Dell Inc.

$4,246.1

18.8%

$2,776.2

17.7%

52.9%

2. HPE/New H3C Group**

$3,740.8

16.6%

$3,348.5

21.4%

11.7%

3. IBM*

$1,637.5

7.3%

$1,042.7

6.6%

57.0%

3. Lenovo*

$1,549.1

6.9%

$834.1

5.3%

85.7%

5. Inspur*

$1,087.9

4.8%

$512.3

3.3%

112.3%

5. Cisco*

$1,070.9

4.8%

$874.9

5.6%

22.4%

5. Huawei*

$966.8

4.3%

$545.8

3.5%

77.1%

ODM Direct

$5,488.2

24.4%

$3,520.9

22.5%

55.9%

Others

$2,741.5

12.2%

$2,227.1

14.2%

23.1%

Total

$22,528.7

100%

$15,682.5

100%

43.7%

Source: IDC Worldwide Quarterly Server Tracker, September 5, 2018

Notes:

* IDC declares a statistical tie in the worldwide server market when there is a difference of one percent or less in the share of revenues or shipments among two or more vendors.

** Due to the existing joint venture between HPE and the New H3C Group, IDC will be reporting external market share on a global level for HPE and New H3C Group as "HPE/New H3C Group" starting from 2Q 2016 and going forward.



Top 5 Companies, Worldwide Server Unit Shipments, Market Share, and Growth, Second Quarter of 2018 (Shipments are in thousands)

Company

2Q18 Unit Shipments

2Q18 Market Share

2Q17 Unit Shipments

2Q17 Market Share

2Q18/2Q17 Unit Growth

1. Dell Inc.

574.6

19.5%

492.7

20.2%

16.6%

2. HPE/New H3C Group**

443.7

15.1%

506.8

20.7%

-12.4%

3.Lenovo*

224.1

7.6%

145.7

6.0%

53.9%

3. Inspur*

203.2

6.9%

119.7

4.9%

69.8%

5. Huawei*

187.4

6.4%

133.9

5.5%

39.9%

5. Super Micro*

175.1

5.9%

136.0

5.6%

28.8%

ODM Direct

732.6

24.9%

527.1

21.6%

39.0%

Others

403.0

13.7%

380.6

15.6%

5.9%

Total

2,943.8

100%

2,442.4

100%

20.5%

Source: IDC Worldwide Quarterly Server Tracker, September 5, 2018

Notes:

* IDC declares a statistical tie in the worldwide server market when there is a difference of one percent or less in the share of revenues or shipments among two or more vendors.

** Due to the existing joint venture between HPE and the New H3C Group, IDC will be reporting external market share on a global level for HPE and New H3C Group as "HPE/New H3C Group" starting from 2Q 2016 and going forward.

Top Server Market Findings

On a geographic basis, Asia/Pacific (excluding Japan) was the fastest growing region in 2Q18 with 55.0% year-over-year revenue growth. The United States grew 48.1%, Latin America grew 47.4%, Europe, the Middle East and Africa (EMEA) grew 28.9%, Canada grew 19.9%, and Japan grew 16.5%. China grew 69.7%.

Demand for x86 servers increased 44.1% in 2Q18 with $20.5 billion in revenues. Non-x86 servers grew 39.8% year over year to $2.1 billion.

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 vendor revenue for a server system. IDC presents data in vendor revenue to determine market share position. Vendor revenue represents those dollars recognized by multi-user system and server vendors for ISS (initial server shipment) 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.

IDC's Quarterly Server Tracker is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly unit shipments and revenues (both vendor revenue and value of shipments), segmented by vendor, family, model, region, operating system, price band, CPU type, and architecture.

For more information about IDC's Worldwide Quarterly Server Tracker, please contact Lidice Fernandez at 305-351-3057 or lfernandez@idc.com.

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools.

About IDC

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. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and engages the most influential technology buyers. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn.

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508-935-4333

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508-935-4585

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