Hewlett-Packard, Dell and IBM continued to lead a global server market that saw revenues and shipments creep upward in the second quarter and that could be posysised for a larger boost going into next year, according to IDC analysts.
IDC and Gartner said server revenues during the second three months of the year grew between 2.5 percent and 2.8 percent, hitting between $12.6 billion (IDC) and almost $12.7 billion (Gartner). Gartner analysts also said in their report Aug. 27 that shipments jumped 1.3 percent, to almost 2.5 million units, while IDC saw a 1.2 percent increase, to 2.2 billion units.
IDC analysts said in their report Aug. 26 that businesses continue to invest in hyperscale data center systems as they transform their infrastructure to meet the growing demands for greater scalability, agility and automation brought on by such trends as mobile computing, big data, social computing and the cloud. At the same time, some of those gains are offset by the continued system consolidation by organizations large and small.
However, the industry could be on the cusp of a significant upswing as businesses look to refresh older servers that were brought on shortly after the financial crisis hit, according to Matt Eastwood, group vice president and general manger of enterprise platforms at IDC. At the same time, Microsoft's decision to end support for Windows Server 2003 next year and Intel's upcoming release of its Xeon E5 "Grantley" server chips based on the "Haswell" architecture—and the expected accompanying server announcements from OEMs—will further fuel server sales, Eastwood said.
"At the same time, IDC is also seeing early stage enterprise investment in 3rd Platform workloads that leverage Webscale architectures typically seen in hyperscale environments," he said in a statement. "These workloads will drive additional interest in software-defined environments that will further enhance the need for servers deployed as the infrastructure underpinning these next generation datacenters."
HP continued to hold onto the top position for both revenues and shipments, according to both analyst firms, with IBM coming in second in revenues and Dell in second in shipments, Gartner said. The fastest growing among the top server vendors was Cisco Systems on the strength of its Unified Computing System (UCS) converged data center solution. Gartner noted that revenues for Cisco in the second quarter jumped 35 percent over the same period last year, and its market share jumped from 4.4 percent to 5.7 percent.
In a conference call with analysts and journalists Aug. 13 to discuss Cisco's latest quarterly financial numbers, CEO John Chambers said that the vendor now has more than 36,500 UCS customers and a run rate of more than $3 billion, and hinted that more news was on the way.
"The innovation pipeline is very strong and you should expect to see announcements in the fall that we’ll continue to accelerate our momentum with UCS and add to our competitive advantage," Chambers said.
HP continues to hold more than 25 percent of the market based on revenues, followed by IBM, which holds 22.6 percent to 23.6 percent, depending on the analyst firm. However, that's due to change, as IBM prepares to sell its x86 server business to Lenovo. The $2.3 billion deal has received a lot of regulatory scrutiny, but cleared a significant hurdle earlier this month when the Committee on Foreign Investments in the United States (CFIUS) approved the sale, which both companies expect to close in the fourth quarter. IBM will keep its Power and mainframe businesses.
Overall, shipments of x86 servers increased by 1.4 percent over the second quarter 2013, while revenues jumped 8.1 percent, according to Jeffrey Hewitt, research vice president at Gartner. At the same time, the Unix server market—populated by the likes of HP's Itanium-based systems and those running on Oracle's SPARC and IBM's Power chips—saw revenues fall 23.2 percent and shipments decline 7.9 percent. Revenues for mainframes dropped 2.2 percent, according to Hewitt.