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    Dell, Cisco Server Sales Grow While HP, IBM Revenues Fall: IDC

    Written by

    Jeff Burt
    Published May 30, 2013
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      Worldwide server revenues and shipments are continuing to slide as businesses consolidate their data center systems and the global economy remains uncertain, according to analysts with IDC.

      Hewlett-Packard and IBM continued to lead the worldwide server market in revenues in the first quarter, but both saw their numbers slip, according to figures released by IDC May 29. In fact, the only top vendors who saw revenues grow during the first three months of the year were Dell—due in large part of demand for its low-power, high-density systems—and Cisco Systems and its Unified Computing System (UCS) converged data center solution.

      The numbers from IDC echoed those from fellow market research firm Gartner, which released figures the day before that also saw global server revenues and shipments fall in the first quarter.

      “Customer demand for new servers is being impacted by ongoing server consolidation, technology transitions and challenging macroeconomic conditions across the globe,” Matt Eastwood, group vice president and general manager of IDC’s Enterprise Platforms group, said in a statement. “It is clear that challenging market conditions are increasing the competitive dynamics for server market share globally, particularly since compute represents a critical element of larger IT transformations that continue to reshape broader enterprise IT market opportunities.”

      Eastwood noted that the only region to see revenue growth was the Asia-Pacific.

      Overall, revenues in the first quarter fell 7.7—to $10.9 billion—compared with the same period in 2012, the fifth time in six quarters that server revenues have dropped, according to IDC. Shipments declined 3.9 percent, to 1.9 million units.

      In addition, revenues essentially fell across the board—3.1 percent in volume systems, 18.3 percent in midrange servers and 17.1 percent in high-end machines. Sales of servers running Microsoft’s Windows operating system dropped 4.2 percent from the first quarter of 2012, and Unix system revenues dropped 35.9 percent. However, due to deployments of high-performance computing (HPC) and cloud infrastructures, Linux server sales grew 3.4 percent—and now represent 23.1 percent of all server revenue—while IBM’s System z mainframes running z/OS continued to sell, with revenues jumping 7 percent, according to IDC.

      In the x86 server segment, revenues fell 1.7 percent while shipments dropped 3.4 percent.

      According to Kuba Stolarski, research manager for enterprise servers at IDC, Unix systems increasingly are being used in hyper-scale Web and HPC deployments, and mainframes are being used in private cloud environments.

      “Non-x86 architectures are about to scale out in a big way, as the lines between x86 and non-x86 workloads are blurring,” Stolarski said in a statement. “In an interesting turn of events, customers are increasingly considering x86 servers for mission-critical and other traditional scale-up solutions and non-x86 servers for innovative, cost-effective and integrated solutions for analytics, cloud, mobile and social platforms.”

      For modular form factors, blade server revenues fell 2.9 percent, with Hewlett-Packard holding 44.6 percent of the market and Cisco and IBM essentially tying for second, with 17.6 and 17.2 percent, respectively. Meanwhile, density-optimized systems—used in huge heterogeneous environments by such Web 2.0 companies as Google and Facebook—saw sales jump 54.8 percent. This segment helped Dell, which held 43.7 percent of the market.

      “Cloud computing is increasingly being utilized as a method to transform the delivery of IT services,” Jed Scaramella, research manager for enterprise servers at IDC, said in a statement. “The modular servers that are the building blocks for clouds (blades for private, density optimized for public) outperformed the market and continue to account for a higher share of market revenue.”

      Dell’s overall server revenues grew 10.1 percent from the same period last year—keeping it in third place—and its market share jumped from 15.5 percent in 2012 to 18.5 percent this year, according to IDC. Meanwhile, Cisco’s revenue grew 34.9 percent, putting it into a statistical tie with Fujitsu (an 8.5 percent decline in revenues) and Oracle (a 26.2 percent drop) for fourth place. Fujitsu’s market share was 5.1 percent, followed by Oracle at 4.8 percent and Cisco at 4.1 percent.

      IDC analysts call differences of 1 percent or less statistical ties.

      Jeff Burt
      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

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