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Third Quarter 2014 Server Revenues Rise

There is reason for optimism in the server market, though the amount of optimism varies depending on the source of data.

Analyst firm Gartner reported that third quarter global server revenues grew by 1.7 percent year-over-year to $12.6 billion. In contrast, rival analyst firm IDC reported that third quarter revenue Server Reportgrew by 4.8 percent year-over-year to $12.7 billion.

In terms of server shipments, Gartner estimated global server shipments of 2.5 million units, for a one percent year-over-year gain. IDC reported server shipment growth of 5.7 percent to 2.4 million units.

Looking deeper into the numbers, a few ongoing trends emerge. One of those trends is that x86 share continues to grow, while RISC/Itanium is declining.

"x86 servers managed to grow 1.2 percent in units and 7.4 percent in revenue in the third quarter of 2014," Errol Rasit, research director at Gartner, said in a statement. "RISC/Itanium Unix server shipments declined 17.1 percent globally for the period and declined 8.0 percent in vendor revenue compared with the same quarter last year."

IDC reported a similar trend, with different numbers. According to IDC, third quarter x86 revenue came in at $10.7 billion, for an 11.6 percent year-over-year gain. Non-x86 servers, which includes RISC/Itanium, had a revenue decline of 20.9 percent, down to $2.0 billion.

"This was the thirteenth consecutive quarter of revenue decline in the non-x86 server segment," IDC's report states. "IBM leads the segment with 60.8% revenue share following a year-over-year revenue decrease of 23.9% when compared with the third quarter of 2013."

HP Remains the Leading Server Vendor

While IDC and Gartner report different numbers, they both agree on the leading server vendor by revenue: HP. IDC gives HP the top spot with a 26.5 percent market share, with IBM in second with a 23.2 percent share. Gartner gives HP a 26.9 percent market share, and IBM an 18.5 percent share.

One bright spot for demand is large-scale deployment by cloud service providers.

"Over the past year, the top four customers in the server market, all of them cloud service providers, have accounted for more than 20 percent of all servers shipped worldwide, and over 10 percent of worldwide server revenue," Kuba Stolarski, Research Manager, Enterprise Servers at IDC, said in a statement.

"Public cloud demand for new servers will continue to outpace the general market over the next several years," Stolarski continued, "as established enterprises and start-ups alike continue to ramp their usage of cloud services for infrastructure and application hosting."

Sean Michael Kerner is a senior editor at ServerWatch and InternetNews.com. Follow him on Twitter @TechJournalist.

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This article was originally published on December 5, 2014
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