Hyperscalers, Cloud, Modern Workloads Drive Surging Demand for Servers

Today’s topics include IDC reporting surging revenue growth for server makers as well as predicting a drop in global smartphone shipments in 2018 but a rise again in 2019.

The global server market is continuing to expand due in part to demand from large cloud service providers and the rise of modern workloads such as artificial intelligence and analytics. Established server original equipment manufacturers such as Dell and Hewlett Packard Enterprise as well as original design manufacturers are handling much of the demand.

According to IDC, server revenues, shipments and average selling prices all grew in the first quarter of 2018, which was the third consecutive quarter of double-digit revenue growth for the industry and the most revenue generated by the server market in history.

According to Sanjay Medvitz, senior research analyst for servers and storage at IDC, “While various OEMs are finding success in this space, ODMs remain the primary beneficiary from the quickly growing hyperscale server demand, now accounting for roughly a quarter of overall server market revenue and shipments."

Global smartphone shipments will drop for the second straight year in 2018, according to IDC’s latest Worldwide Quarterly Mobile Phone Tracker. About 1.462 billion smartphones will be shipped in 2018, which is down from 1.465 billion handsets that shipped in 2017.

However, starting in 2019 and beyond, the global smartphone market is expected to grow roughly 3 percent annually, with worldwide shipments reaching 1.654 billion in 2022.

In its latest research, IDC also forecasts that the first commercially ready 5G smartphones will appear in the second half of 2019, with a ramp-up across most regions happening in 2020. IDC projects 5G smartphone volumes to account for roughly 7 percent of all smartphones in 2020, or 212 million in total.