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HP and Dell battling it out in the EMEA server market

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December 2, 2015

Judging where we stand from, it looks like HP and Dell are the two main contenders in the EMEA (Europe, Middle East and Africa) server market, according to market research firm Gartner. The other players aren't as close in terms of the numbers.

There was a small increase in demand during calendar Q3-2015 as shipments went up 1.4 percent to 533 million units, and the value of those sales about increased 3.7 percent to an estimated $3 billion.

But that was preceded by a shrinking market in Q2. “This year has been up and down for the server market in EMEA,” said Adrian O’Connell, research director at Gartner.

He said the region’s server market segment was driven by a refresh cycle that offset the pesky forex issue, but warned that “the ongoing economic environment still remains difficult for server vendors, nevertheless”.

HP, Dell and Cisco all benefited from Lenovo’s acquisition of IBM’s EMEA x86 server organization at the start of 2015, and although the Chinese firm edged into third place, market share remained below that of IBM a year ago, Gartner added.

That said, HPE declined in revenue estimates by about 1.6 percent to $1.146 billion indicating a higher mix of lower value servers sold as their shipments grew 2.1 percent to 207,646.

As far as Dell is concerned, server revenues grew about 11.1 percent to $504.4 million but interestingly, its unit sales declined 1.2 percent to 106,619 compared to HPE.

For its part, Lenovo sold about $256.7 million worth of servers, up from $15.44 million a year ago, and units grew to 34,577 versus 7,191.

And then Cisco leaped into the fourth position displacing Big Blue, as revenues and shipments swelled by double digits.

IBM’s server turnover rate more than halved to $206.4 million from $440.8 million a year earlier, and its shipments didn’t place it among the top five vendors.

“The EMEA server market is at risk of bi-furcating into HP, Dell and then everyone else,” said Gartner.

“All vendors face challenges but, aside from Cisco, most are losing market share to HP and Dell. The pressure is on to improve efficiencies now or be left behind in the race for future enterprise business,” added Gartner.

Between them in Q3, HP and Dell accounted for about 55 percent of revenues in the EMEA market and nearly 60 percent of units.

On a global basis, the server market reported a 7.5 percent increase in server vendor revenue estimates to $13.5 billion globally, and a 9.2 percent spike to 2.76 million servers.

It will be interesting to see what 2016 has in store for us. We'll keep you posted on these and other developments as they happen.

Source: Gartner Market Research.

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