IDC: Server refresh cycle propels industry forward in Q2

Summary:According to IDC, the worldwide server market increased in Q2 as the enterprise undertakes server upgrades.

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Credit: Dell

The worldwide server market increased 2.5 percent year-over-year to $12.6 billion in the second quarter as businesses undertake server refreshment.

According to research firm IDC, server unit shipments also increased in the second quarter of 2014, rising 2.2 percent year-over-year to 2.2 million units. Gartner says investments in hyperscale datacenter capacity have largely been offset by server consolidation, which remains a "strategic focus" of both large and small businesses worldwide.

In addition, IDC says that corporations are continuing to refresh their server technology, which is "expected to lift the market going forward."

Matt Eastwood, Enterprise Platforms General Manager at IDC says:

"The server market is experiencing the beginning of a cyclical refresh cycle as systems deployed shortly after the financial crisis are retired and replaced. IDC expects this refresh cycle will continue well into 2015 and be further accelerated by Microsoft's announcement that it is ending support for Windows Server 2003 coupled with Intel's forthcoming release of the Grantley Xeon EP and a significant number of related server platform announcements."

At the same time, the research firm is also seeing enterprise investment in 3rd Platform workloads which leverage Webscale architectures typically seen in hyperscale environments -- systems which can be scaled appropriately as demand for computing power and capacity increases.

"These workloads will drive additional interest in software-defined environments that will further enhance the need for servers deployed as the infrastructure underpinning these next generation datacenters," Eastwood says.

Over the second quarter, Hewlett-Packard held the top position in the worldwide server market with a factory revenue share of 25.4 percent, due to improving demand for x86-based ProLiant servers. IBM came in second with a 23.6 percent share for the quarter, despite a steep drop in demand for IBM's Power-based systems -- which IDC says is a sign of impending server refreshment. Dell maintained the third position in the worldwide server market, and both Oracle and Cisco ended the quarter in a tied fourth position.

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Gartner says in Q2 2014, demand for x86 servers improved with revenues increasing 7.8 percent year-over-year to $9.8 billion worldwide. Non-x86 servers experienced a revenue decline of 12.8 percent year-over-year to $2.7 billion, the twelfth consecutive quarter of revenue decline for the technology. Demand for blade servers, used in the enterprise' virtualized and converged environments, increased 7 percent year-over-year to $2.1 billion.

Kuba Stolarski, Research Manager of Enterprise Servers at IDC said:

"Demand for servers in the public cloud continues to be a major driving force for server market growth. While many of the largest of these companies have already undergone periodic datacenter expansions over the past year, public cloud demand for new servers will continue to outpace the general market in the immediate future.

As these customers search for new ways to maximize datacenter efficiency, their technological choices may help accelerate emerging trends in low power and alternative server architectures."

In related news, on Wednesday, research firm Gartner said in Europe, the Middle East and Africa (EMEA), server shipments in the second quarter of 2014 grew by 0.8 percent -- a rise for the first time in 11 quarters. Total EMEA server revenue reached $3.2 billion, a 3.8 percent year-over-year increase.

Topics: Servers, Hardware

About

Charlie Osborne, a medical anthropologist who studied at the University of Kent, UK, is a journalist, freelance photographer and former teacher. She has spent years travelling and working across Europe and the Middle East as a teacher, and has been involved in the running of businesses ranging from media and events to B2B sales. Charli... Full Bio

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