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All of the top five server vendors suffered revenue declines in the first quarter of 2013 except for Dell, which grew 14.4 percent, as worldwide server shipments declined 0.7 percent year-over-year, while revenue declined 5 percent from the first quarter of 2012, according to a report from IT research firm Gartner.
IBM held the lead in the worldwide server market based on revenue. The company totaled just over $3 billion in server vendor revenue worldwide, with a total share of 25.5 percent in the first quarter of 2013. However, this share was down 2.5 percentage points from the same period in 2012. In the first quarter of 2013, System X–the x86 server designed to support Microsoft Windows, Linux and virtualization–accounted for 29.3 percent of IBM’s total server revenue.
“The first quarter of 2013 was certainly not a strong period for the server market on a global level,” Jeffrey Hewitt, research vice president at Gartner, said in a statement. “The only regions to post increases were Asia/Pacific and the United States, with Asia/Pacific showing the strongest growth with shipment and revenue increases of 7 percent and 1.7 percent, respectively. While these two regions grew in both shipments and revenue, it was not enough to offset the declines of the other geographies–all of which declined in server shipments and revenue for the quarter.”
In server shipments, HP remained the worldwide leader in the first quarter of 2013 in spite of a year-on-year shipment decline of 15.2 percent. Dell and Cisco were the only vendors in the top five to have positive shipment growth, with increases of 2.6 percent and 33 percent.
In the first quarter of 2013, x86 server revenue increased by a modest 1.8 percent. RISC/Itanium Unix server revenue declined by 54.8 percent, due to migrations to alternative platforms by users seeking lower-cost alternatives and more flexibility. Revenue in the Other CPU segment dropped by 9.9 percent, following growth in the fourth quarter of 2012.
“x86 server shipment growth was flat in the quarter, while revenue increased 1.8 percent. RISC/Itanium Unix servers declined globally for the period, down 38.8 percent in shipments and down 35.8 percent in vendor revenue compared to the same quarter last year,” Hewitt continued. “The ‘other’ CPU category, which is primarily mainframes, exhibited an increase of 3.6 percent in worldwide revenue.”
HP took a quarter of the market, down 14.4 percent, and posted revenue of $2.9 billion, followed by Dell, which posted $2.1 billion in revenue and 18 percent market share, a 14.4 percent improvement. Fujitsu, representing just under 5 percent of the market, landed in fourth place, while Oracle, with 4.6 percent market share, rounded out the top five.
In terms of server form factors, blade servers fell 5.9 percent in shipments and 5 percent in revenue for the quarter. The rack-optimized form factor dropped 5.2 percent in shipments and 2 percent in revenue in the first quarter of 2013. The report noted the market environment remains difficult for all vendors, but those most exposed to the enterprise customer segment face the biggest challenges.
“Following a challenging 2012, 2013 started in very much the same way,” Adrian O’Connell, research director at Gartner, said in a statement. “Budgets are restricted and server infrastructure spending is clearly not the highest priority for many organizations.”