Enterprise Storage

Server Hosting Companies Rally behind Leaders HPE and Dell

Market proportions have gradually declined in the global server market over the last year. With the increasing growth of hyperscale data centers, companies are finding it difficult to hold on to their traditional customer footprint. According to a Gartner report, in the third quarter of 2016, worldwide server revenue declined 5.8 percent year over year, and shipments declined 2.6 percent from the third quarter of 2015. Gartner observed that among the top five vendors, only Cisco increased revenue in the third quarter, while Huawei and Inspur Electronics saw growth in shipments. HPE, Dell and Lenovo all experienced declines in both server revenue and shipments.

"The 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 (without new hardware) to meet their server application needs," said http://www.gartner.com/analyst/16025, research vice president at Gartner. "Server providers will 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."

Only the Eastern Europe market posted a growth of 0.9 percent while most of the other regions showed a decline in shipments. Japan maintained its stronghold over the Asian market and was able to increase revenues by 1.3 percent.

"x86 servers continue to be the predominant platform used for large-scale data center build-outs across the globe, and the growth of integrated systems (including hyperconverged integrated systems), while still relatively small as an overall percentage of the hardware infrastructure market, also provided a boost to the x86 server space for the year," Hewitt says.

"The outlook for 2017 suggests that modest growth will occur being driven primarily by service provider build-outs while the enterprise will show a slight decline in unit purchases with only slight growth in revenue,” he says.

HPE maintained its leadership position in the worldwide server market. Whereas Dell secured the second spot with 17.5 percent market share. Lenovo found itself on the third spot with 7.8 percent of the market. IBM dropped to the fifth position and experienced the largest decline among the top five vendors.