IT Trends

Server Shipments Decline, While Increased Price Points Drive Revenues Upward

The server market contracted in terms of volume in the first quarter of 2019, while revenues increased compared to the same period a year ago.

In Q1 2019, total worldwide server shipments reached 2.6 million units, a decline of 5.6 percent. But revenues were up worldwide at $19.8 billion, an increase of 4.4 percent compared to Q1 2018, according to a report released by market research firm IDC.

According to IDC: “The overall server market slowed in 1Q19 after experiencing six consecutive quarters of double-digit revenue growth, although pockets of robust growth remain. Volume server revenue increased by 4.2 percent to $16.7 billion, while midrange server revenue grew 30.2 percent to $2.1 billion. High-end systems contracted steeply for a second consecutive quarter, declining 24.7 percent year over year to $976 million.”

Dell Technologies was the top vendor with a 20.2 percent share of the market (up from 19.3 percent in the same quarter last year). Revenues were up 8.9 percent to $3.99 billion. The company shipped 517,000 units, down 7 percent from last year.

HPE/New H3C Group came in second with a 17.8 percent market share, down from 18.5 percent last year. Revenues were up 0.2 percent to $3.52 billion. Unit shipments declined 10.9 percent to 406,000.

Inspur/Inspur Power Systems, Lenovo and Cisco essentially tied for third place in the worldwide server market in terms of revenues. (See chart.) Of all the top vendors, only Inspur/Inspur Power Systems saw an increase in unit shipments. The company shipped 204,900 servers, an increase of 17 percent over Q1 2018.

Server Shipments Decline, While Increased Price Points Drive Revenues Upward 

According to IDC, “On a geographic basis, Japan was the fastest growing region in 1Q19 with 9.8 percent year-over-year revenue growth. Asia/Pacific (excluding Japan) grew 7.4 percent during the quarter, while Europe, the Middle East and Africa (EMEA) grew 4.1 percent on aggregate. The United States grew 3.5 percent; Canada declined 9.6 percent; and Latin America contracted 14.9 percent. China saw its 1Q19 vendor revenues grow 11.4 percent year over year.”

“Demand for x86 servers increased 6.0 percent in 1Q19 to $18.5 billion in revenue. Non-x86 servers contracted -13.7 percent year over year to $1.3 billion.”

Further information can be found on IDC’s site.

About the Author

David Nagel is the former editorial director of 1105 Media's Education Group and editor-in-chief of THE Journal, STEAM Universe, and Spaces4Learning. A 30-year publishing veteran, Nagel has led or contributed to dozens of technology, art, marketing, media, and business publications.

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