Server revenues in Australia have been hit by an 18.6 percent dip year-on-year in the third quarter of 2016, while server shipments also slumped by 12 percent compared the same period in 2015, technology industry analyst Gartner has reported.
Figures released by Gartner reveal a global slump in top vendor server revenue and shipments, down 5.8 percent and 2.6 percent respectively, but show a particularly poor period in Australia.
Across the biggest vendors in Australia by server revenue - HPE, Cisco, Dell, Oracle and Lenovo - revenue fell US$32 million, or 18.6 percent, from US$173 million in the third quarter of 2015 to US$140 million for the same period in 2016.
Among the top five vendors, Dell and Cisco were the only players to increase revenue in the Australian market for the quarter, with Dell server revenues growing 19 percent to US$21.1 million and Cisco showing growth of 15 percent to US$35.69 million.
In Australian server shipments, Huawei made a remarkable jump from 29 units shipped in Q3 2015 to 970 for the same period in 2016, a sign it is ramping up its distribution in the region. Dell also increased shipments for the third quarter period, up 17 percent to 5928 units.
HPE, Oracle and Lenovo all experienced local revenue declines. HPE, while continuing to dominate the market with a 35.3 percent share, shrunk 32.5 percent to US$49.7 million, down from US$73.7 million for the same period in 2015. Lenovo and Oracle fell 22 percent and 31 percent to US$6 million and US$10.2 million respectively.
Unit shipments for Australia were all down for HPE, Cisco and Lenovo, though Cisco suffered only a 6.9 percent decrease compared to HPE and Lenovo’s 26.2 percent and 25.8 percent respective dips.
Jeffrey Hewitt, research vice president at Gartner said the server market had been impacted in the third quarter period 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," he said.
"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."