Server market revenue down 4.4 percent in Q4

Taiwanese makers of servers continue to see robust growth

Even as server shipments went up, revenue in the market declined in last year's fourth quarter, as demand for higher-end systems remained weak, according to research firm IDC.

During the period, server revenue decreased by 4.4 percent to US$14.2 billion. This marked the fourth consecutive quarter the server market has shown a year-over-year decline.

Although server shipments increased 8.2 percent to 2.5 million units, the growth came from lower-end x86 "volume systems". In contrast, middle and high-end systems saw sharp drops in revenue.

Server demand, however, could pick up in the first quarter, when a refresh cycle is expected to begin, IDC said on Thursday. To tap the market, vendors will have to focus on building systems geared toward serving the mobile Internet, social networking and cloud computing, the research firm added.

In the fourth quarter, Hewlett-Packard held a statistical tie with IBM for the position of top server vendor by revenue. In server market revenue, HP had a 26.9 percent share, just a 0.1 percentage point ahead of IBM. HP had a 5.7 percent year-over-year growth, while IBM witnessed the biggest drop among the top vendors, down by 28.5 percent on diminishing demand across its server products.

But like in the previous quarter, the biggest growth came from the "ODM Direct" segment, a grouping of emerging server vendors. These original design manufacturers are made up of Taiwanese firms such as Compal, Inventec and Quanta Computer that are selling systems directly to major cloud providers such as Amazon and Google.

During the quarter, the ODM Direct segment grabbed a 6.4 percent share, with a 47.3 percent year-over-year growth. The market share was high enough to rank this segment in the fourth place, behind Dell which had a 14.5 percent share.

Growth in the ODM segment will help the server market recover and push it closer to making up for sales lost in high-end systems, IDC added.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags serversIDCIBMhardware systemsHewlett-Packard

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

GGG Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?