According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, vendor revenue in the worldwide server market declined 11.6% year over year to just over $20.0 billion during the second quarter of 2019 (2Q19). Worldwide server shipments declined 9.3% year over year to just under 2.7 million units in 2Q19.
After a torrid stretch of prolonged market growth that drove the server market to historic heights, the global server market declined for the first time since the fourth quarter of 2016. All classes of servers were impacted, with volume server revenue down 11.7% to $16.3 billion, while midrange server revenue declined 4.6% to $2.4 billion and high-end systems contracted by 20.8% to $1.3 billion.
“The second quarter saw the server market’s first contraction in nine quarters, albeit against a very difficult compare from one year ago when the server market realized unprecedented growth,” said Sebastian Lagana, research manager, Infrastructure Platforms and Technologies. “Irrespective of the difficult compare, factors impacting the market include a slowdown in purchasing from cloud providers and hyperscale customers, an off-cycle in the cyclical non-x86 market, as well as a slowdown from enterprises due to existing capacity slack and macroeconomic uncertainty.”
Overall Server Market Standings, by Company
The number one position in the worldwide server market during 2Q19 was shared* by Dell Technologies and the combined HPE/New H3C Group with revenue shares of 19.0% and 18.0% respectively. Dell Technologies declined 13.0% year over year, while HPE/New H3C Group was down 3.6% year over year. The third position went to Inspur/Inspur Power Systems, which increased its revenue by 32.3% year over year. Lenovo and IBM tied* for the fourth position with revenue shares of 6.1%, and 5.9% respectively. Lenovo saw revenue decline by 21.8% year over year while IBM saw its revenue contract 27.4% year over year. The ODM Direct group of vendors accounted for 21.1% of total revenue and declined 22.9% year over year to $4.23 billion. Dell Technologies led the worldwide server market in terms of unit shipments, accounting for 17.8% of all units shipped during the quarter.
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Top 5 Companies, Worldwide Server Vendor Revenue, Market Share, and Year-Over-Year Growth, Second Quarter of 2019 (Revenues are in US$ millions) |
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|
Company |
2Q19 |
2Q19 |
2Q18 |
2Q18 |
2Q19/2Q18 |
|
T1. Dell Technologies* |
$3,809.0 |
19.0% |
$4,375.8 |
19.3% |
-13.0% |
|
T1. HPE/New H3C Groupa* |
$3,607.4 |
18.0% |
$3,743.5 |
16.5% |
-3.6% |
|
3. Inspur/Inspur Power Systemsb |
$1,438.8 |
7.2% |
$1,087.9 |
4.8% |
32.3% |
|
T4. Lenovo* |
$1,212.0 |
6.1% |
$1,549.1 |
6.8% |
-21.8% |
|
T4. IBM* |
$1,188.6 |
5.9% |
$1,637.5 |
7.2% |
-27.4% |
|
ODM Direct |
$4,232.7 |
21.1% |
$5,488.2 |
24.2% |
-22.9% |
|
Rest of Market |
$4,536.1 |
22.7% |
$4,764.5 |
21.0% |
-4.8% |
|
Total |
$20,024.6 |
100% |
$22,646.3 |
100% |
-11.6% |
|
Source: IDC Worldwide Quarterly Server Tracker, September 4, 2019 |
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Notes:
* IDC declares a statistical tie in the worldwide server market when there is a difference of one percent or less in the share of revenues or shipments among two or more vendors.
a Due to the existing joint venture between HPE and the New H3C Group, IDC will be reporting external market share on a global level for HPE and New H3C Group as “HPE/New H3C Group” starting from 2Q 2016.
b Due to the existing joint venture between IBM and Inspur, IDC will be reporting external market share on a global level for Inspur and Inspur Power Systems as “Inspur/Inspur Power Systems” starting from 3Q 2018.
In addition to the table above, a graphic illustrating worldwide revenue share for the top 5 server companies over the previous five quarters is available by viewing this press release on IDC.com.
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Top 5 Companies, Worldwide Server Unit Shipments, Market Share, and Growth, Second Quarter of 2019 (Shipments are in thousands) |
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Company |
2Q19 Unit |
2Q19 |
2Q18 Unit |
2Q18 |
2Q19/2Q18 |
|
1. Dell Technologies |
479,942 |
17.8% |
576,956 |
19.4% |
-16.8% |
|
2. HPE/New H3C Groupa |
438,060 |
16.3% |
464,962 |
15.7% |
-5.8% |
|
3. Inspur/Inspur Power Systemsb |
232,885 |
8.7% |
203,225 |
6.8% |
14.6% |
|
4. Lenovo |
181,166 |
6.7% |
224,138 |
7.6% |
-19.2% |
|
T5. Super Micro* |
139,289 |
5.2% |
175,092 |
5.9% |
-20.4% |
|
T5. Huawei* |
116,994 |
4.3% |
187,356 |
6.3% |
-37.6% |
|
ODM Direct |
678,940 |
25.2% |
732,643 |
24.7% |
-7.3% |
|
Rest of Market |
424,675 |
15.8% |
403,124 |
13.6% |
5.3% |
|
Total |
2,691,952 |
100% |
2,967,496 |
100% |
-9.3% |
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Source: IDC Worldwide Quarterly Server Tracker, September 4, 2019 |
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Table Notes: Please refer to the Notes following the first table in this press release.
Top Server Market Findings
On a geographic basis, Canada was the fastest growing region in 2Q19 with 13.4% year-over-year revenue growth. Europe, the Middle East, and Africa (EMEA) grew 2.0% on aggregate while Japan declined 6.7% and Asia/Pacific (excluding Japan) contracted 8.1%. The United States was down 19.1% and Latin America contracted 34.2%. China saw its 2Q19 vendor revenues decline 8.7% year over year.
Revenue generated from x86 servers decreased 10.6% in 2Q19 to $18.4 billion. Non-x86 servers contracted 21.5% year over year to $1.6 billion.
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 vendor revenue for a server system. IDC presents data in vendor revenue to determine market share position. Vendor revenue represents those dollars recognized by multi-user system and server vendors for ISS (initial server shipment) 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 Quarterly Server Tracker is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly unit shipments and revenues (both vendor revenue and value of shipments), segmented by vendor, family, model, region, operating system, price band, CPU type, and architecture.
For more information about IDC’s Worldwide Quarterly Server Tracker, please contact Lidice Fernandez at 305-351-3057 or [email protected].
About IDC Trackers
IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC’s Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools.
About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world’s leading media, data and marketing services company. To learn more about IDC, please visit www.idc.com.