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Server sales show signs of slight surge

Hooray for hyperscale, which now outsells Oracle and Cisco

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Server sales continue to rise, according to IDC's new Worldwide Quarterly Server Tracker, which suggests the long-term outlook for servers might even be half-way decent.

The market-watcher says “factory revenue in the worldwide server market increased 2.5% year over year to US$12.6 billion in the second quarter of 2014 (2Q14).”

The hero behind that number was midrange, up 11.6 per cent year over year thanks to technology refresh cycles kicking in. That cycle has been accelerated by the looming demise of Windows Server 2003, users' desire to get their hands on new Intel chippery and budgets finally allowing replacement of systems acquired after the financial crisis of 2008/09. “Volume systems”, aka low-end kit, saw vendors book 4.9% revenue growth after demand rose for a fifth consecutive quarter.

Enterprise kit took a 9.8 per cent dive, but IDC says that number is no cause for alarm because it is a tricky segment to count accurately.

An interesting tension in the market concerns servers destined for use in hyperscale data centers and those used in more conventional capacities. Sales of the former are going well, but the latter server varieties are falling victim to server consolidation projects.

There's also good news for HP, as it emerges as the planet's top server vendor. Interestingly, IDC has also popped in a line for “ODM direct” sales, which we take to be a way of describing sales by the likes of Quanta and Inspur. At $835m for the quarter, such vendors are ahead of Cisco and Oracle by sales value.

Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, Second Quarter of 2014 (Revenues are in Millions)

Vendor

2Q14 Revenue

2Q14 Market Share

2Q13 Revenue

2Q13 Market Share

2Q14/2Q13 Revenue Growth

1. HP

$3,194

25.4%

$3,071

25.0%

4.0%

2. IBM

$2,972

23.6%

$3,311

27.0%

-10.2%

3. Dell

$2,083

16.6%

$2,227

18.2%

-6.5%

4. Oracle*

$737

5.9%

$709

5.8%

3.9%

4. Cisco*

$727

5.8%

$537

4.4%

35.4%

    ODM Direct

$835

6.6%

$669

5.5%

24.7%

    Others

$2,021

16.1%

$1,736

14.2%

16.4%

Total

$12,570

100%

$12,261

100%

2.5%

Source: IDC Worldwide Quarterly Server Tracker, August 26, 2014.

Before long, IBM won't appear on this chart: Lenovo's acquisition of its x86 servers means the Chinese vendor will taken its place. When it does so, its market share is likely to be smaller than the $2.972bn it booked in Q2 because it will only have Power systems to count. Sales of those servers, IDC says, “declined sharply year over year in advance of a significant technology refresh.” ®

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