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Worldwide server shipments grew 1 percent year-over-year in the third quarter of 2014, while revenue moved upward 1.7 percent from the third quarter of 2013, according to a report from IT research firm Gartner.
A similar report from analytics firm IDC said the worldwide server market increased 4.8 percent year over year to $12.7 billion in the third quarter of 2014, and volume systems experienced 8.8 percent revenue growth on a year-to-year basis, the sixth consecutive quarter that volume system demand increased year over year.
Despite a decline of 0.9 percent, HP was the worldwide server market leader based on revenue in the third quarter of 2014, according to the Gartner report.
In server shipments, HP remained the worldwide leader in the third quarter of 2014 despite a year-over-year shipment decline of 14.9 percent for the quarter.
Of the top five vendors in server shipments worldwide, all produced shipment increases except for HP and IBM.
The company posted nearly $3.4 billion in server revenue to account for 26.9 percent of worldwide server revenue, while Cisco experienced the highest growth in the third quarter with 30.8 percent.
“Cisco has built up a strong blade-server brand with UCS that is readily considered as a leading blade platform and is now the number two blade vendor globally,” Errol Rasit, research director at Garter, told eWEEK. “As part of leading integrated systems products such as Vblock and Flexpod, the success of those investments also supports Cisco’s server business. Q3 is a fairly quiet quarter, so Cisco’s positivity really highlights the consistency of its business.”
HP also held the top position in the worldwide server market, according to IDC, with 26.5 percent vendor revenue share for the third quarter. Rival IBM placed second with 18.2 percent share for the quarter as vendor revenue decreased, while Dell maintained the third position with 17.8 percent vendor revenue market share.
Gartner reported the Asia/Pacific region posted the highest shipment growth at 8.7 percent and 7.5 percent increase in revenue, while North America posted a more modest 0.7 percent in shipments and 2.6 percent increase in revenue.
Meanwhile, Western Europe saw a 2 percent shipments decrease, but a growth of 3.8 percent in revenue, while Eastern Europe fell 10.8 percent in shipments and 6.3 percent in vendor revenue, and the Middle East and Africa posted a 5.2 percent shipments decrease and 6.7 percent decrease in revenue.
Japan declined 6.7 percent in shipments and 10.6 percent in vendor revenue, and Latin America dropped 6.3 percent in shipments and 4.1 percent in vendor revenue for the quarter.
In terms of platform, x86 servers managed to grow 1.2 percent in units and 7.4 percent in revenue in the third quarter of 2014, while RISC/Itanium Unix server shipments declined 17.1 percent globally for the period and declined 8.0 percent in vendor revenue compared with the same quarter last year.
“We believe the market is still largely constrained from an enterprise spending perspective,” Rasit explained. “Servers are still undergoing a consolidation phase in the enterprise, largely via the use of virtualization, but more recently, server budgets have been borrowed from to fund storage and networking projects, specifically to improve efficiency in those DC Infrastructure areas.”
He said the main engine for growth comes from the Hyperscale segment, which is a class of huge service providers, many of which are consumer services providers, such as search services, or social and gaming services.
“As this demand is consumer driven, and funded directly by consumers or indirectly via advertising, this segment’s spending is relatively unconstrained compared to enterprise spending expectations,” Rasit explained. “The net effect of these two forces though, is for steadily improving server spending in single digit year over year growth rates.”