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Thursday, March 01, 2018
HPE and Dell Server Sales Soar in Q4


HPE and Dell are tied for the No. 1 spot in server sales, IDC reports, with market shares of 18.4 percent and 17.5 percent respectively.

The server market continues to gain momentum, as traction for newer Purley- and EPYC-based offerings grows. IDC says that vendor revenue in the worldwide server market increased 26.4% year over year to $20.7 billion in the fourth quarter of 2017 (4Q17). While demand from cloud service providers has propped up overall market performance, other areas of the server market continue to show growth now as well. Worldwide server shipments increased 10.8% year over year to 2.84 million units in 4Q17.

High-end systems grew 41.1% to $2.9 billion, driven by IBM's z14 launch last quarter. IDC expects continued long-term secular declines in high-end system revenue, with short periods of growth related to major platform refreshes.

"Hyperscalers remained a central driver of volume demand in the fourth quarter with leaders such as Amazon, Facebook, and Google continuing their datacenter expansions and updates," said Sanjay Medvitz, senior research analyst, Servers and Storage at IDC. "ODMs continue to be the primary beneficiaries from hyperscale server demand. Some OEMs are also finding growth in this area, but the competitive dynamic of this market has also driven many OEMs such as HPE to focus on the enterprise. For example, HPE/New H3C Group grew 38.6% and 114.6% in High-End and Midrange Enterprise Servers, respectively. Other highlights in the quarter include robust growth from Dell Inc., which continues to capitalize on expanded opportunities from its merger with EMC, and IBM, which experienced another successful quarter from its refreshed system z business."

Server Market Standings, by Company

HPE/New H3C Group and Dell Inc. were tied for first in the worldwide server market with 18.4%, and 17.5% market shares respectively in 4Q17. HPE/New H3C Group revenue increased 10.1% year over year to $3.8 billion, while Dell Inc. increased 39.9% year over year to $3.6 billion. HPE's share and year-over-year growth rate includes revenues from the H3C joint venture in China that began in May of 2016; thus, the reported HPE/New H3C Group combines server revenue for both companies globally.

Top 5 Companies, Worldwide Server Vendor Revenue, Market Share, and Growth, Fourth Quarter of 2017 (Revenues are in US$ Millions)

Company

4Q17 Revenue

4Q17 Market Share

4Q16 Revenue

4Q16 Market Share

4Q17/4Q16 Revenue Growth

1. HPE/New H3C Group

$3,801.9

18.4%

$3,454.1

21.1%

10.1%

1. Dell Inc.

$3,607.0

17.5%

$2,577.9

15.8%

39.9%

3. IBM

$2,693.0

13.0%

$1,791.8

11.0%

50.3%

4. Lenovo

$1,090.0

5.3%

$946.8

5.8%

15.1%

4. Cisco

$1,051.4

5.1%

$916.1

5.6%

14.8%

ODM Direct

$4,245.4

20.6%

$2,866.9

17.5%

48.1%

Others

$4,164.4

20.2%

$3,790.5

23.2%

9.9%

Total

$20,653.1

100.0%

$16,344.1

100.0%

26.4%

Source: IDC Worldwide Quarterly Server Tracker, February 2017

IBM captured the third market position at 13.0% share with revenue growing 50.3% year over year to $2.7 billion. Lenovo and Cisco were statistically tied* for fourth position.

Lenovo had 5.3% share, with revenue increasing 15.1% to $1.1 billion and Cisco had 5.1% share with revenue increasing 14.8% to $1.1 billion. The ODM Direct group of vendors grew revenue by 48.1% to $4.2 billion. Dell Inc. led the server market in terms of unit share at 20.5%.



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