Amid the coronavirus pandemic, Hewlett Packard Enterprise has surpassed Dell Technologies in worldwide server revenue while Inspur is starting to become a major server competitor on a global basis, according to new data by market research firm IDC.
“Global demand for enterprise servers was strong during the second quarter of 2020,” said Paul Maguranis, senior research analyst for IDC’s Infrastructure Systems, Platforms and Technologies Group. “We certainly see areas of reduced spending, but this was offset by investments made by large cloud builders and enterprises targeting solutions that support shifting infrastructure needs caused by the global pandemic.”
It is key to note that IDC declares a statistical tie when there is a difference of 1 percent or less in the share of revenue or shipments among two or more vendors. In this second-quarter 2020 report, IDC has declared statistical ties for first place and fourth place.
CRN USA breaks down the top five global server market-share leaders along with ODM Direct and a look at the overall server market in the second quarter of 2020.
Worldwide server market sales and trends
Global Revenue: US$24 billion
Year-over-year growth: 19.8 percent
Worldwide server revenue reached US$24 billion during the second quarter of 2020, up nearly 20 percent year over year. Global server shipments grew double digits at 18 percent year over year due to nearly 3.2 million server units being shipped in the quarter.
In terms of the server class, volume server revenue was up 22 percent to US$18.7 billion year over year, while midrange server revenue growth was flat at US$3.3 billion. High-end systems grew 44 percent year over year to US$1.9 billion, according to IDC.
Revenue generated from x86 servers fell 17 percent to US$21.6 billion year over year, while non-x86 server revenue jumped 47 percent to US$2.4 billion.
Looking at the server numbers based on geography, the Asia-Pacific region performed very well, growing at a combined 31 percent year over year, with China outperforming by spiking 40 percent compared with the same quarter one year ago.
Year over year, the US grew 25 percent, Latin America was up 15 percent, Canada declined 11 percent, and Europe, the Middle East and Africa (EMEA) fell 6 percent.
Fourth Place (Tie): IBM
Market Share: 6 percent
The IT giant generated US$1.45 billion in server revenue during the second quarter, up 22 percent year over year. IBM was able to tie for fourth place in terms of market share by capturing 6 percent share of the worldwide market, representing basically flat share growth compared with the same quarter one year ago.
IBM did not make IDC’s top six in terms of worldwide server unit shipments, which means the company sold less than 130,000 units during the quarter.
IBM recently reported second fiscal quarter revenue of $18.1 billion, down 5.4 percent year over year. In June, IBM acquired cloud security startup Spanugo to boost its compliance and protection capabilities in highly regulated industries.
Fourth Place (Tie): Lenovo
Market Share: 6.1 percent
The US$50 billion PC leader and data center provider generated US$1.47 billion in server revenue during the quarter, an increase of 21 percent year over year. Hong Kong-based Lenovo statistically tied for fourth place in market share by capturing 6.1 percent share of the global server market. In second-quarter 2019, Lenovo captured 6 percent market share.
Lenovo shipped approximately 193,000 server units in the second quarter, up 6.6. percent year over year, when it shipped 181,100 units. The company owned 6.1 percent share of the market in terms of total server units sold.
Despite the COVID-19 pandemic, Lenovo recently reported huge revenue growth during its first fiscal quarter with data center revenue up nearly 20 percent year over year while PC and Smart Devices revenue reached $10.6 billion.
Third Place: Inspur
Market Share: 10.5 percent
China-based Inspur benefited greatly from strong server demand in the Asia-Pacific region, growing revenue faster than any other vendor worldwide during the second quarter.
Inspur generated US$2.53 billion in server revenue, up 77 percent year over year. The company captured 10.5 percent share of the global server market in the second quarter, up significantly from 7.1 percent share one year ago.
“Investments in Asia-Pacific were particularly strong, growing 31 percent year over year,” said IDC’s Maguranis in regard to the overall server market.
Inspur reported the largest growth in server shipments as well by shipping 353,300 units, up nearly 53 percent year over year. Inspur captured 11.1 percent share in terms of the total servers shipped during the quarter.
First Place (Tie): Dell Technologies
Market Share: 13.9 percent
Although Dell Technologies widened its worldwide server market-share lead over HPE in the first quarter of 2020, HPE has regained the leadership position from Dell in the second quarter.
Total sever revenue for the Round Rock, Texas-based infrastructure giant fell 12 percent year over year in the second quarter to $3.34 billion. The drop in server revenue led to Dell’s market share falling from 18.9 percent in second-quarter 2019 to 13.9 percent.
Dell also witnessed the largest drop of any vendor in terms of the total amount of server units shipped in the quarter, according to IDC. Dell shipped a total of 432,500 servers during the second quarter, down 10 percent year over year. Its server shipment share fell from 17.8 percent in the second quarter of 2019 to 13.6 percent.
Although Dell’s server revenue fell, the company is remaining relatively stable despite the coronavirus pandemic thanks to its broad portfolio, which includes PCs. For its recent second fiscal quarter, Dell reported $22.7 billion in revenue, down 3 percent year over year. The company recently hired former Cisco veteran Rola Dagher as its new global channel chief, while also restructuring its executive sales teams.
First Place (Tie): HPE/New H3C Group
Market Share: 14.9 percent
Hewlett Packard Enterprise together with China-based New H3C Group generated more server revenue and shipped more units than any other vendor worldwide during the second quarter. Due to the joint venture between HPE and New H3C Group, IDC combines the two companies in its market-share report as HPE/New H3C Group.
HPE captured US$3.58 billion in server revenue during the quarter, representing a decline of 2 percent year over year. The company won 14.9 percent share of the global server market, down from 18.2 percent share in second-quarter 2019.
HPE shipped 456,600 server units during the quarter, up 3 percent year over year, according to IDC’s data. The company’s global server shipment share was 14.3 percent, down from 16.5 percent year over year.
HPE maintains a strong presence in China through its partnership with New H3C, where HPE owns a 49 percent stake and the Chinese company Unisplendour owns a 51 percent share. HPE recently reported third fiscal quarter revenue of US$6.8 billion, down from US$7.2 billion year over year.
Market Share: 28.8 percent
Original design manufacturers (ODMs) accounted for the largest market share for server revenue, although IDC combines all ODMs in terms of server revenue share and total shipments. ODMs design and manufacture servers that are later rebranded by other companies for sale.
These ODMs captured 28.8 percent share of the total server market in the second quarter, up from 21.1 percent year over year.
The group of ODMs generated $6.92 billion in server revenue, an increase of more than 63 percent year over year compared with US$4.23 billion in server revenue in the second quarter of 2019. When combining ODM server vendor shipments, the group shipped a total of nearly 1.1 billion server units, up a whopping 62 percent year over year. Approximately 34 percent of all servers shipped in the second quarter came via ODMs.