Worldwide Server Market Revenues Decline -6.2% in Second Quarter as Market
Demand Remains Weak, According to IDC
FRAMINGHAM, Mass. -- August 27, 2013
According to the International Data Corporation (IDC) Worldwide Quarterly
Server Tracker, factory revenue in the worldwide server market decreased -6.2%
year over year to $11.9 billion in the second quarter of 2013 (2Q13). This was
the second consecutive quarter of year-over-year revenue decline, as server
market demand continued to soften in most geographic regions. Server unit
shipments decreased -1.2% year over year in 2Q13 to 2.0 million units, the
third consecutive quarter where year-over-year server shipments have declined.
On a year-over-year basis, volume systems experienced a -2.4% revenue decline.
At the same time, demand for midrange and high-end systems experienced
year-over-year revenue declines of -22.3% and -9.5% respectively in 2Q13. All
three segments were impacted by relatively difficult year-over-year compares
combined with transitions in the technology refresh cycles.
"Mainstream SMB and enterprise server customers around the world continue to
focus on consolidation, virtualization, and migration initiatives aimed at
increasing efficiency and lowering datacenter infrastructure costs. At the
same time, challenging economic conditions are dampening demand for new IT
projects necessary to grow the server market globally," said Matt Eastwood,
Group Vice President and General Manager, Enterprise Platforms at IDC. "It is
clear that the competitive dynamics in the server market remain fierce as the
leading server vendors work to offset weak demand for generally higher margin
Unix and blade servers with lower margin rack and density optimized servers."
Overall Server Market Standings by Vendor
*IBM held the number one position in the worldwide server market with 27.9%
factory revenue share in 2Q13. IBM experienced a -10.0% year-over-year
decline in factory revenue losing 1.2 points of share in the quarter on
soft demand for System x and Power Systems.
*HP held the number two position in the market with 25.9% factory revenue
share following a -17.5% year-over-year decline in factory revenue
resulting in a loss of 3.6 points of factory revenue share. HP experienced
disappointing demand for x86-based ProLiant servers coupled with continued
declines in HP Integrity server demand in the quarter.
*Dell maintained third place with 18.8% factory revenue market share in
2Q13. Dell's factory revenue increased 10.3% compared to 2Q12, helping
Dell to gain 2.8 points of factory revenue share. Dell now holds its
highest-ever server market share in any quarter.
*Oracle maintained the number four position with 6.0% factory revenue
share; Oracle's 2Q13 factory revenue decreased -5.7% compared to 2Q12.
*Cisco ended the quarter in the number five market position with 4.5%
factory revenue share following 42.6% year-over-year revenue growth. With
its highest ever market share, Cisco now holds sole possession of fifth
place in the server market, breaking last quarter's statistical tie with
Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, Second
Quarter of 2013
(Revenues are in Millions)
2Q13 2Q13 2Q12 2Q12 2Q13/2Q12
Vendor Revenue Market Revenue Market Revenue
Share Share Growth
1. IBM $3,311 27.9 % $3,680 29.1 % -10.0 %
2. HP $3,071 25.9 % $3,724 29.5 % -17.5 %
3. Dell $2,227 18.8 % $2,020 16.0 % 10.3 %
4. $710 6.0 % $753 6.0 % -5.7 %
5. Cisco $537 4.5 % $376 3.0 % 42.6 %
Others $2,001 16.9 % $2,088 16.5 % -4.2 %
All $11,857 100 % $12,641 100 % -6.2 %
Source: IDC Worldwide Quarterly Server Tracker, August 2013.
An interactive graphic showing the relative market shares of the top 5 vendors
in the worldwide server market over the previous five quarters is available
here. The chart is intended for public use in online news articles and social
media. Instructions on how to embed this graphic can be found by viewing this
press release on IDC.com.
x86 Server Market Dynamics
Demand for x86 servers weakened in 2Q13, with revenues declining -1.3% in the
quarter to $8.7 billion worldwide as unit shipments were relatively flat
(-0.1%) at 1.9 million servers. This was the second consecutive quarter of
year-over-year factory revenue decline for the x86 server segment. HP led the
market with 31.3% revenue share despite a -14.8% revenue decline. HP lost 5.0
points of market share when compared to 2Q12. Dell retained second place,
increasing x86 factory server revenue 10.3% year-over-year and securing 25.7%
of revenue share while gaining 2.7 points of share when compared with the
second quarter of 2012. IBM rounded out the top three positions, holding 12.8%
revenue share following a -10.8% year-over-year revenue decline.
Modular Form Factor Results
There are two types of modular form factors, each with a distinct use case.
Blade servers, which are highly leveraged in enterprises' virtualized
environments, declined -6.2% year over year to $2.0 billion. Blades now
account for 16.9% of total server revenue. HP maintained the number one spot
in the blade server market in 2Q13 with 44.8% revenue share; Cisco and IBM
held the second and third positions in the blade market with 19.6% and 17.2%
revenue share, respectively.
Density Optimized servers, utilized by large hyperscale datacenters,
experienced very strong demand in 2Q13. Revenue grew 26.6% year over year in
2Q13 to $735 million as unit shipments increased 13.8% to just under 200,000
servers. Density Optimized servers now represent 6.2% of all server revenue
and 10.0% of all server shipments. Dell maintained the number one spot in the
Density Optimized segment in 2Q13 with 60.5% revenue share.
"Even though the overall blade market was down, several of the top vendors
experienced positive growth within their converged and integrated system
businesses. IDC finds more enterprises adopting integrated systems to increase
the agility and efficiency of their IT infrastructure," said Jed Scaramella,
research manager, Enterprise Servers at IDC. "Density Optimized servers
achieved the highest growth of any segment in the server market. The
datacenter build-outs by service providers are driving growth in the industry
and represent a strategic opportunity for OEMs, while at the same time IDC is
seeing new participants enter the market targeting the hyperscale datacenter
Other Server Market Findings
*IBM's System z mainframe running z/OS experienced its third consecutive
quarter of growth, increasing revenue 9.9% year over year to $1.2 billion,
representing 9.8% of all server revenue in 2Q13.
*Linux server demand continued to be positively impacted by cloud
infrastructure deployments, as hardware revenue increased 1.5% year over
year to $2.8 billion in 2Q13. Linux servers now represent 23.2% of all
server revenue, up 1.8 points when compared with the second quarter of
*Microsoft Windows server demand was down -5.1% year over year in 2Q13 with
quarterly server hardware revenue totaling $5.8 billion representing 49.3%
of overall quarterly factory revenue, up 0.5 points over the prior year's
*Unix servers experienced a revenue decline of -21.0% year over year to
$1.8 billion, representing 15.1% of server revenue for the quarter. This
was the lowest quarterly Unix server revenue ever reported by IDC.
"The non-x86 server market is in the middle of a major transformation, as
hardware platforms associated with Unix continue to look for a bottom in their
secular decline, mainframes find new 3rd platform workloads, and the market
prepares for new RISC-based system-on-a-chip architectures to enter," said
Kuba Stolarski, Research Manager, Enterprise Servers at IDC. "As the lines
between x86 and non-x86 workloads continue to blur, customers will find
compelling cases outside of x86 for hyperscale and scale-up solutions for
their analytics, cloud, mobile, and social platforms."
IDC's Server Taxonomy
IDC's Server Taxonomy maps the eleven price bands within the server market
into three price ranges: volume servers, midrange servers and high-end
servers. The revenue data presented in this release is stated as factory
revenue for a server system. IDC presents data in factory revenue to determine
market share position. Factory revenue represents those dollars recognized by
multi-user system and server vendors for ISS and upgrade units sold through
direct and indirect channels and includes the following embedded server
components: Frame or cabinet and all cables, processors, memory,
communications boards, operating system software, other bundled software and
initial internal and external disk shipments.
IDC's Worldwide Quarterly Server Tracker is a quantitative tool for analyzing
the global server market on a quarterly basis. The Tracker includes quarterly
shipments (both ISS and upgrades) and revenues (both customer and factory),
segmented by vendor, family, model, region, operating system, price band, CPU
type, and architecture. For more information, please contact Hoang Nguyen at
508-935-4718 or firstname.lastname@example.org.
About IDC Trackers
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Matt Eastwood, 508-935-4503
Jed Scaramella, 508-935-4596
Michael Shirer, 508-935-4200
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