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Gartner: global server sales dropped in the third quarter

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November 30, 2016

Gartner asserted us today that the server market dropped in the third quarter, with only Cisco and another supplier category showing some revenue growth.

Global server revenue were lower by 5.8 percent from a year ago with shipments dropping by 2.6 percent.

In the x86 category, there was a 1.6 percent slide in revenue and a 2.3 percent drop in shipments, indicating that proprietary server revenues and units fell further than for x86 servers.

Gartner server specialist Jeffrey Hewitt said: "The worldwide server market was impacted during the third quarter of 2016 by generally conservative spending plans globally. This was compounded by the ability of end users to leverage additional virtual machines on existing x86 servers, but without new hardware, to meet their server application needs."

The Gartner report says that in x86 server shipments, only Huawei and Inspur Electronics experienced some growth. They make a dynamic pair standing out against a rather dull background.

In revenue terms:

  • HPE led with a 25.5 per cent share, though declining 11.8 per cent
  • Dell is second with a 17.5 per cent portion and a 7.9 per cent fall
  • Third-placed Lenovo has a 7.8 per cent share with a 6.7 per cent fall
  • Cisco is close by in fourth position with a 7.3 per cent share and 5 per cent growth
  • IBM is number five with a 7 per cent share and 33 per cent fall
  • The 'others category' has a 34.8 percent share and saw a small 7.4 percent growth. The server shipment numbers reveal the same overall pattern, with slight differences.

    But again, Huawei and Inspur were the only vendors in the top five to increase server shipments in the quarter.

    But overall, all geographies saw tougher conditions, with EMEA showing a third consecutive quarter of decline.

    So what can vendors do? Hewitt says they "need to reinvigorate and improve their value propositions to help end users justify server hardware replacements and growth, if they hope to drive the market back into a positive state."

    Of course, that's rather easy to say, but much harder to do. Whatever Huawei and Inspur are doing, they need to do more of the same.

    Source: Gartner.


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