Worldwide Server Market Revenue Increased 12.6% Year Over Year in the Fourth Quarter of 2018, According to IDC

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According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, vendor revenue in the worldwide server market increased 12.6% year over year to $23.6 billion during the fourth quarter of 2018 (4Q18). Worldwide server shipments increased 5.0% year over year to just under 3.0 million units in 4Q18.

The overall server market continues to experience robust demand with 4Q18 marking the fifth consecutive quarter of double-digit revenue growth and its highest total revenue in a single quarter ever. Volume server revenue increased by 17.8% to $19.0 billion, while midrange server revenue grew 30.3% to $2.5 billion. High-end systems declined 28.3% to $2.1 billion.

“Reduced demand from hyperscale companies created downward pressure on worldwide server market growth rates during the quarter,” said Sebastian Lagana, research manager, Infrastructure Platforms and Technologies at IDC. “This was offset by increased server sales to enterprise customers and higher average selling prices (ASPs). Enterprises are buying richly configured servers to support resource intensive workloads, resulting in higher ASPs and pushing revenue growth higher than growth from unit shipments.”

Overall Server Market Standings, by Company

Tied* for the number one position in the worldwide server market during 4Q18 were Dell Inc., at 18.7% revenue share, and HPE/New H3C Group, with 17.8% revenue share, growing 20.4% and 10.5% year to year respectively. IBM was the third-ranked server supplier during the quarter capturing 8.3% of total server revenues. IBM’s performance during the quarter excludes sales generated through the company’s recently established partnership with Inspur Power Systems. Inspur/Inspur Power Systems and Lenovo tied for fourth with revenue shares of 6.6% and 6.2% respectively. Inspur/Inspur Power Systems increased its revenue 70.7% year over year and Lenovo increased its revenue 33.8% year over year. The ODM Direct group of vendors accounted for 20.1% of total revenue, up 11.6% year over year to $4.7 billion. This was an uncharacteristically low growth rate for this group of companies. Dell Inc. led the worldwide server market in terms of unit shipments, accounting for 19.4% of all units shipped during the quarter.

 
Top 5 Companies, Worldwide Server Vendor Revenue, Market Share, and Growth, Fourth Quarter of 2018 (Revenues are in US$ Millions)
Company  

4Q18 Revenue

 

4Q18 Market Share

 

4Q17 Revenue

 

4Q17 Market Share

 

4Q18/4Q17 Revenue Growth

T1. Dell Inc.*   $4,426.2   18.7%   $3,677.2   17.5%   20.4%
T1. HPE/New H3C Group*a   $4,199.8   17.8%   $3,801.9   18.1%   10.5%
3. IBMc   $1,951.0   8.3%   $2,652.9   12.8%   -27.6%
T4. Inspur/Inspur Power Systems*b   $1,548.8   6.6%   $907.2   4.3%   70.7%
T4. Lenovo*   $1,458.7   6.2%   $1,090.0   5.2%   33.8%
ODM Direct   $4,736.2   20.1%   $4,245.4   20.2%   11.6%
Rest of Market   $5,294.3   22.4%   $4,566.1   21.8%   15.9%
Total   $23,615.0   100%   $20,980.7   100%   12.6%
Source: IDC Worldwide Quarterly Server Tracker, March 6, 2019
 

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 Q2 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 Q3 2018.
 
c IBM server revenue excludes sales of Power Systems generated through Inspur Power Systems in China starting from Q3 2018.
 

In addition to the table above, a graphic illustrating worldwide revenue market share for the top 5 server companies over the previous five quarters is available by viewing this press release on IDC.com.

 
Top 5 Companies, Worldwide Server Unit Shipments, Market Share, and Growth, Fourth Quarter of 2018 (Shipments are in thousands)
Company  

4Q18 Unit Shipments

 

4Q18 Market Share

 

4Q17 Unit Shipments

 

4Q17 Market Share

 

4Q18/4Q17 Unit Growth

1. Dell Inc.   580.6   19.4%   582.5   20.4%   -0.3%
2. HPE/New H3C Groupa   473.8   15.8%   483.7   17.0%   -2.0%
3. Inspur/Inspur Power Systemsb   247.6   8.3%   182.4   6.4%   35.7%
T4. Huawei*   211.6   7.1%   166.4   5.8%   27.2%
T4. Lenovo*   190.7   6.4%   181.6   6.4%   5.0%
ODM Direct   695.9   23.3%   653.0   22.9%   6.6%
Rest of Market   592.8   19.8%   602.1   21.1%   -1.5%
Total   2,993.0   100%   2,851.6   100%   5.0%
Source: IDC Worldwide Quarterly Server Tracker, March 6, 2019
 

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.
 

Top Server Market Findings

On a geographic basis, Asia/Pacific (excluding Japan) was the fastest growing region in 4Q18 with 25.5% year-over-year revenue growth. Latin America grew 15.4% during the quarter, while the Europe, the Middle East and Africa (EMEA) region grew 15.2% on aggregate. Japan grew 5.3% in 4Q18, the United States grew 5.1%, and Canada declined 5.7%. China saw its 4Q18 vendor revenues grow 30.7% year over year.

Demand for x86 servers increased 18.7% in 4Q18 to $21.1 billion in revenue. Non-x86 servers contracted 21.6% year over year to $2.5 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 that activates and engages the most influential technology buyers. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn.

All product and company names may be trademarks or registered trademarks of their respective holders.

Sebastian Lagana
508-935-4585
[email protected]

Michael
Shirer
508-935-4200
[email protected]