Server business stalls in EMEA
Western Europe hits new low
Server sellers in Europe, the Middle East, and Africa didn't have as much fun as their counterparts in North America and Asia in the third quarter, according to statistics compiled by the box counters at IDC.
IDC reckons that factory revenues for server makers in the EMEA region were up only six-tenths of a per cent in Q3, to $3.2bn, with shipments falling a point to 546,883 units. Across the Western European countries, server revenues fell by 1.4 per cent and the percent of the server pie coming from Western Europe fell to 74.8 per cent, the lowest level that IDC has ever seen. Part of that is due to Central and Eastern European server growth, but part of the decline is absolutely due to the European debt and euro currency crises.
"The server market is displaying signs of deceleration as macroeconomic conditions worsen worldwide," explained Beatriz Valle, senior research analyst in the enterprise server group at IDC EMEA, in a statement. "After a very strong second quarter that exhibited the fastest rate of annual growth in seven years, the sluggish pace of growth in the third quarter indicates that, although it is early to assess the full impact the eurozone crisis will have in the Western European server market, strict fiscal policies and a slackening of private demand have already had a significant dampening effect on sales of systems."
As El Reg previously reported, IDC said that worldwide server sales rose by 4.2 per cent in Q3 to $12.74bn and shipments rose by 8.7 per cent to 2.07 million boxes.
If you take EMEA out of the global picture, then server sales in the Americas and Asian regions together rose by 5.4 per cent to $9.51bn and shipments were up by 5.9 per cent to 1.52 million units. While not explosive, that is decent growth and a situation where sales and shipments are moving in the same direction more or less in lockstep.
In Western Europe, France managed to eke out 1.6 per cent server revenue growth in the third quarter, according to IDC, and the UK did a bit better with 2.1 per cent. In Germany, server revenues were off 3.6 per cent in the quarter, and the overall Western Europe segment saw a 3.5 per cent revenue decline to $2.41bn.
Average selling prices in Western Europe were flat when measured in euros, and the modest revenue growth that the region had as a whole (again, measured in euros, not dollars) in the third quarter was driven by a shift from RISC, Itanium, and proprietary systems to blade servers. The Middle East and Eastern Europe countries as a group had double-digit shipment growth and a 34 per cent revenue spike. Central and Eastern Europe had 15.1 per cent jump in server sales, to $457.3m, thanks to great sales in Poland, Russia, and the Czech Republic, and the Middle East and North Africa segment of EMEA declined 1.8 per cent to $355.9m.
By platform type, x86 servers accounted for a staggering 98.3 per cent of machines sold and at $2.35bn in revenues, 72.8 per cent of revenues. The other styles of servers using Itanium, RISC, and other non-x86 CISC processors accounted for a total of $875.5m in sales (down 6.5 per cent) and only 9,297 machines (down 13.9 per cent).
Itanium-based servers drove $175.5m in revenues (off 31.2 per cent thanks mainly to declining sales of HP's Integrity and Superdome lines), while RISC-based machines were up 9.1 per cent to $468.5m. CISC-based machines not dependent on x86 processors – mostly mainframes from IBM, Unisys, and Fujitsu – were off 7.9 per cent to $236.1m. IBM's sales of mainframes running the z/OS operating system were off 14.7 per cent in the quarter.
In terms of the primary operating systems on the servers that made it out of the factory doors to EMEA customers and distributors in Q3, Windows was the dominant platform with $1.7bn in sales and now accounting for 53.5 per cent of the total server pie. However, server sales among SMB shops slipped in EMEA, and Windows server revenue growth was a muted at a mere 3.7 per cent uptick in the period running from July through September. Linux-based servers saw a 5.1 per cent uptick in Q3 while Unix-based machines as a group saw a 5.8 per cent downtick.
The volume server space, where machines cost under $25,000, was essential flat, with only four-tenths of a point of revenue growth, to $2.2bn. The midrange segment, for machines that cost between $25,000 and $250,000, had a 15.9 per cent jump from a resurgence in RISC/Unix server sales to $468m. The high-end segment, where machines cost in excess of $250,000, took an 8.7 per cent hit to $558.8m
While IBM and HP are neck-and-neck for global server domination if US dollars are the way to keep score, in EMEA, HP has been the undisputed leader for the past 15 quarters. HP had $1.31bn in server sales, giving it 40.5 per cent of the total EMEA server pie, and $1.1bn of that came from its ProLiant x86 server line.
IBM ranked number two, with $851.2m in server sales in EMEA in Q3; about $263m of that came from its Power Systems line of machines, which run AIX, IBM i, and Linux. Both HP and IBM saw their server sales shrink, but Dell and Oracle absolutely stole several points of market share. Dell's sales in EMEA rose by 17.1 per cent to $427m, while Oracle's sales exploded by 28.3 per cent to $247.2m.
Fifth-ranked Fujitsu lost some share, declining 4.9 per cent to $174m. Other vendors, buoyed by upstarts Cisco Systems and Lenovo, collectively showed 11.9 per cent growth to $219m in the quarter. Interestingly, Cisco accounted for 7 per cent of x86 blade server sales in EMEA and 20 per cent in the United States in Q3. ®