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Gartner Says Worldwide Server Revenue Declined 5.8 Percent in the Third Quarter of 2016; Shipments Were Down 2.6 Percent

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In the third quarter of 2016, worldwide server declined 5.8 percent year over year, and shipments declined 2.6 percent from the third quarter of 2015, according to Gartner, Inc. Among the top five vendors, only Cisco increased in the third quarter, while Huawei and Inspur Electronics saw growth in shipments. HPE, Dell and Lenovo all experienced declines in both server and shipments.

"The server market was impacted during the third quarter of 2016 by generally conservative spending plans globally. This was compounded by the ability of end users to leverage additional virtual machines on existing x86 servers (without new hardware) to meet their server application needs," said Jeffrey Hewitt, research vice president at Gartner. "Server providers will need to reinvigorate and improve their value propositions to help end users justify server hardware replacements and growth, if they hope to drive the market back into a positive state."

All regions showed a decline in shipments except Eastern Europe, which posted growth of 0.9 percent. In terms of revenue, all regions except for Japan experienced a decline. Japan grew by 1.3 percent.

x86 servers declined 2.3 percent in shipments and 1.6 percent in revenue in the third quarter of 2016. All vendors in the top five except for Cisco experienced a decline in revenue.

In x86 server shipments, only Huawei and Inspur Electronics experienced growth.

Despite a decline of 11.8 percent, HPE continued to lead in the worldwide server market, based on revenue, with 25.5 percent market share. Dell declined 7.9 percent, but maintained the second spot in the market with 17.5 percent market share. Lenovo secured the third spot with 7.8 percent of the market. IBM dropped to the fifth position and experienced the largest decline among the top five vendors.

Table 1Worldwide: Server Vendor Revenue Estimates, 3Q16 (U. S. Dollars)

Company 3Q16 Revenue 3Q16 Market Share (%) 3Q15 Revenue 3Q15 Market Share (%) 3Q15-3Q16 Growth (%)HPE 3,247,087,045 25.5 3,682,417,477 27.3 -11.8Dell 2,227,185,685 17.5 2,419,231,403 17.9 -7.9Lenovo 994,447,261 7.8 1,065,664,119 7.9 -6.7Cisco 929,440,000 7.3 885,600,000 6.6 5.0IBM 889,723,595 7.0 1,327,761,197 9.8 -33.0Others 4,426,866,909 34.8 4,120,053,348 30.5 7.4Total 12,714,750,495 100.0 13,500,727,543 100.0 -5.8

Note: Beginning in the second quarter of 2016, HPE's server sales in China are reflected in H3C.

Source: Gartner (November 2016)

HPE secured the No 1 position in server shipments in the third quarter of 2016, with 18.3 percent of the market. Despite a decline of 9.8 percent, Dell secured the second spot with 16.8 percent market share. Huawei and Inspur were the only vendors in the top five to increase server shipments in the third quarter of 2016.

Table 2Worldwide: Server Vendor Shipment Estimates, 3Q16 (Units)

Company 3Q16 Shipments 3Q16 Market Share (%) 3Q15 Shipments 3Q15 Market Share (%) 3Q15-3Q16 Growth (%)HPE 493,268 18.3 613,101 22.2 -19.5Dell 452,383 16.8 501,262 18.1 -9.8Lenovo 228,097 8.5 242,005 8.8 -5.7Huawei 163,355 6.1 134,163 4.9 21.8Inspur Electronics 119,943 4.5 99,417 3.6 20.6Others 1,234,567 45.9 1,172,725 42.4 5.3Total 2,691,613 100.0 2,762,672 100.0 -2.6

Note: Beginning in the second quarter of 2016, HPE's server sales in China are reflected in H3C.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 01 2016. 15:53 IST