Worldwide Server Revenue Declined 2.3 Percent in the First Quarter of 2016, but Shipments Rose 1.7 Percent

In the first quarter of 2016, worldwide server revenue declined 2.3 percent year over year, while shipments grew 1.7 percent from the first quarter of 2015, according to Gartner, Inc.

“Although revenue declined, the first quarter of 2016 continued with a trend of low-level shipments growth on a global level with a variation in results by region,” said Jeffrey Hewitt, research vice president at Gartner. “The drop in revenues in light of shipment increases demonstrates that the servers that shipped during the period had lower average selling prices than those that shipped in the same time frame last year.”

All regions showed a decline in either shipments and/or vendor revenue except for Asia/Pacific, which posted 9.7 percent growth in revenue and 8.4 percent growth in shipments for the period. Western Europe grew 1.4 percent in shipments and 1.5 percent in revenue. North America posted a 1 percent increase in shipments but declined 5.9 percent year over year in revenue.

“The real driver of global growth continues to be the hyperscale data center segment. The enterprise and small or midsize business (SMB) segments remain relatively flat as end users in these segments accommodated their increased application requirements through virtualization and considered cloud alternatives,” Mr. Hewitt said.

Hewlett Packard Enterprise (HPE) continued to lead in the worldwide server market, based on revenue, with a 25.2 percent market share (see Table 1). HPE was the only vendor in the top five to experience growth in the first quarter of 2016. Despite a decline of 1.4 percent, Dell maintained the second spot in the market with 17.3 percent market share. IBM secured the third position with 9.7 percent of the market, but experienced the largest decline among the top five vendors.

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

Company 1Q16

Revenue

1Q16 Market Share (%) 1Q15

Revenue

1Q15 Market Share (%) 1Q16-1Q15 Growth (%)
HPE 3,296,591,967 25.2 3,191,694,948 23.8 3.3
Dell 2,265,272,258 17.3 2,296,473,026 17.1 -1.4
IBM 1,270,901,371 9.7 1,887,939,141 14.1 -32.7
Lenovo 871,335,542 6.7 970,254,659 7.2 -10.2
Cisco 850,230,000 6.5 890,179,930 6.6 -4.5
Others 4,537,261,457 34.7 4,157,871,705 31.0 9.1
Total 13,091,592,596 100.0 13,394,413,410 100.0 -2.3

Source: Gartner (June 2016)

In server shipments, HPE remained the worldwide leader in the first quarter of 2016, even with a year-over-year shipment decline of 1.6 percent (see Table 2). HPE’s worldwide server shipment share was 19.4 percent, representing a 0.6 percent drop in share from the first quarter of 2015.

Of the top five vendors in server shipments worldwide, only Huawei and Inspur produced shipment increases.

Table 2
Worldwide: Server Vendor Shipments Estimates, 1Q16 (Units)

Company 1Q16

Shipments

1Q16 Market Share (%) 1Q15

Shipments

1Q15 Market Share (%) 1Q16-1Q15 Growth (%)
HPE 526,115 19.4 534,559 20.0 -1.6
Dell 464,292 17.1 507,433 19.0 -8.5
Lenovo 199,189 7.3 220,379 8.3 -9.6
Huawei 130,755 4.8 105,803 4.0 23.6
Inspur 109,390 4.0 91,847 3.4 19.1
Others 1,286,097 47.4 1,209,319 45.3 6.3
Total 2,715,838 100.0 2,669,340 100.0 1.7

Source: Gartner (June 2016)

Additional information is available to clients who have access to Gartner’s Servers Quarterly Statistics. This database provides worldwide market size and share data by vendor revenue and unit shipments. Segments include: region, vendor, vendor brand, subbrand, CPU type, CPU group, max CPU, platform, price band, operating system and distribution channel.

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