Good News for Server Business: Revenue up 25 Percent in Q4 2017

Dell EMC and Hewlett Packard Enterprise (HPE) were neck-and-neck in the worldwide server market based on revenue in the fourth quarter of 2017.

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Here’s an encouraging data point for the entire IT business world: Worldwide server shipments and sales continue to move up and to the right, according to industry researcher Gartner.

In an environment in which a sharply increasing number of companies are not buying servers because they are subscribing to cloud-based business services, big IT suppliers (internet service providers, telecommunications companies, social networks, financial services, government, science and others) with hyper-scale data centers are buying more and more servers.

Online storage and collaboration provider Dropbox, for one example, has recently opened a new installation in a Vantage data center in Silicon Valley utilizing more than 9,700 servers.

The worldwide server market continued to grow through 2017 as worldwide server revenue increased a whopping 25.7 percent in the fourth quarter of 2017, while shipments grew 8.8 percent year over year, Gartner said in a report released March 8.

Full-Year 2017 Server Market Results

In calendar year 2017, worldwide server shipments grew 3.1 percent and server revenue increased 10.4 percent compared with full-year 2016.

Dell EMC and Hewlett Packard Enterprise (HPE) were neck-and-neck in the worldwide server market based on revenue in the fourth quarter of 2017. Dell EMC ended the year in the No. 1 spot with 19.4 percent market share, followed closely by HPE with 19.3 percent of the market. Dell EMC experienced strong growth in the quarter with 39.9 percent growth, while HPE grew 5.5 percent. Inspur Electronics experienced the strongest growth in the fourth quarter of 2017 with 127.8 percent growth.

In server shipments, Dell EMC maintained the No. 1 position in the fourth quarter of 2017 with 18.2 percent market share. Despite a decline of 12.8 percent in server shipments, HPE was second with 13.8 percent of the market.

"Server growth was driven by relatively strong economies for the quarter across the globe,” Jeffrey Hewitt, a research vice president at Gartner, said in a media advisory. "This was a somewhat surprising quarter because the strength was exhibited in a variety of positive server shipment and revenue mixes in almost all geographies."

Double-digit Growth in APAC, NA

Regional results were mixed. North America and Asia/Pacific showed double-digit growth in revenue (27.6 percent and 35.1 percent, respectively). In shipments, North America grew 9.7 percent and Asia/Pacific grew 21.2 percent. EMEA posted strong yearly revenue growth of 19.9 percent while shipments decreased 7.9 percent.

The x86 server market increased in revenue by 23.7 percent, and shipments were up 8.9 percent in the fourth quarter of 2017.

"Both enterprises and hyperscale data centers produced positive results globally for the year as end users seek to implement more digital business solutions," Hewitt wrote. "The outlook for 2018 suggests that modest growth will continue, with enterprise end users taking an ongoing hybrid approach to both on-premises and public cloud choices based on their server application objectives."

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor of Features & Analysis at eWEEK, responsible in large part for the publication's coverage areas. In his 12 years and more than 3,900 stories at eWEEK, he...