Server growth remains healthy in Q2, despite fall in midrange systems

Demand for higher-end and low-end servers helped drive growth

Server sales continued to remain steady in the second quarter, in spite of weakening demand for midrange systems, according to research firm IDC.

During the period, vendors collectively saw their server revenue grow by 6.1 per cent year over year to $US13.5 billion. Meanwhile, server shipments increased by 3.2 per cent from a year ago.

Revenue in the market was up on sales of higher-end servers, and lower-end systems used for hyperscale computing. However, demand for midrange systems fell by 5.4 per cent year over year, due to the recent ending of the x86 server refresh cycle, IDC said.

In the second quarter, HP remained the market leader, with a 25.4 per cent share. The company's density-optimized servers were in high demand, with sales of the products jumping by 119 percent from a year ago.

In second place was Dell with a 17.5 per cent share. Its blade and rack servers saw healthy growth.

Third placed IBM was the only vendor among the top five to see its market share and revenue fall during the quarterly period. Last year, the company sold off its x86 server business to Chinese PC maker Lenovo. As a result, its server revenue fell by 32.9 per cent year over year.

In contrast, Lenovo saw its server revenue soar by over 500 per cent, benefiting from the acquisition deal with IBM. The Chinese company is hoping to become a major player in the server space, as it diversifies away from simply selling PCs.

Lenovo reached a statistical tie with Cisco for fourth place in the server market.

Geographically, the U.S. was the fastest-growing market for servers, with 12.6 per cent year over year growth. The Asia Pacific region, excluding Japan, followed the US with 12 per cent growth.

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Michael Kan

IDG News Service
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