Global Server Market Hits $US25.4B In Q4 With New Leader
For the first time since 2017, Hewlett Packard Enterprise is the worldwide leader in server market share after overthrowing Dell Technologies in the fourth quarter of 2019.
HPE, along with its China-based joint venture New H3C Group, captured more than 16 percent of the global market in the fourth quarter, according to new data by IT market research firm IDC.
Total worldwide server revenue grew 7.5 percent year over year to $US25.4 billion in the fourth quarter, while server shipments increased 14 percent to just over 3.4 million units. Volume server revenue grew 12 percent year over year to $US19.7 billion along with 9 percent growth in high-end systems to $US2.4 billion. Midrange server sales declined 14 percent to $US3.3 billion compared to the same quarter one year ago.
However, the growth in global server sales mostly benefited original design manufacturers (ODMs), according to Sebastian Lagana, research manager for IDC’s Infrastructure Platforms and Technologies.
“While the server market recaptured growth during the fourth quarter, it was a bit of a mixed bag as robust hyperscaler demand benefited the ODM direct vendor group, which combined with strong non-x86 server purchases to drive the broader market,” said Lagana.
Here are the top six vendors who generated the most server revenue and sold the most servers in the fourth quarter of 2019.
Market Share Q4 2019: 5.1%
The China-based technology conglomerate generated $US1.28 billion in server sales during the quarter, up 2 percent year over year. Huawei won 5.1 percent of the global server market, down from 5.4 percent compared to the same quarter one year ago.
Huawei shipped 216,700 server units in the quarter, up 2 percent compared to the 211,600 servers it sold in the fourth quarter of 2018. The company has been in hot water lately in the U.S. with the White House reportedly seeking to cut out Huawei on 5G projects while the U.S. Department of Justice is charging the company with violating the RICO (Racketeer Influenced and Corrupt Organization) Act.
Market Share Q4 2019: 5.6%
Lenovo’s server sales hit $US1.42 billion in the quarter, down 2 percent year over year from $US1.46 billion. The Hong Kong-based company, with U.S. headquarters in Morrisville, N.C., captured 5.6 percent of the global server market share compared to 6.2 percent market share in the fourth quarter of 2018.
Lenovo shipped nearly 233,900 servers in the fourth quarter, representing a 23 percent spike compared to the 190,700 units it sold in the same quarter one year ago. Lenovo’s software and services business is now running at a $US1 billion quarter run rate as the company’s gross profit jumped 10 percent year over year in its third fiscal quarter.
4. Inspur/Inspur Power Systems
Market Share Q4 2019: 6.8%
The dominant server market share leader in China, Inspur generated $US1.74 billion in server revenue worldwide, up 12 percent year over year. Inspur was one of the few vendors to grow market share during the quarter by capturing 6.8 percent share, up from 6.6. percent year over year. (Due to the existing joint venture between IBM and Inspur, IDC reports market share on a global level for Inspur and Inspur Power Systems.)
The China-based computing and big data specialist shipped 270,500 servers in the quarter, up 9 percent compared to the 247,600 units sold in fourth quarter 2018. Inspur is injecting artificial intelligence into many of its new server lines.
Market Share Q4 2019: 9.1%
IBM is new to IDC’s top three list in terms of worldwide server market share. The Armonk, N.Y.-based company generated $US2.3 billion in server sales in the quarter, up nearly 18 percent year over year, making IBM the fastest growing server company in the world. IBM captured 9.1 percent of the global market, up from 8.3 percent in the fourth quarter of 2018.
In terms of servers shipped during the quarter, IBM did not rank in the top five meaning that the company sold less than 210,000 servers during the quarter. Earlier this year, IBM unveiled that its CEO Virginia Rometty will be succeeded by Arvind Krishna effective April 6.
2. Dell Technologies
Market Share Q4 2019: 15.7%
For the first time in years, Dell Technologies was not the quarterly worldwide market share leader in servers. In the fourth quarter of 2019, Dell generated nearly $US4 billion in server sales, down 10 percent compared to $US4.43 billion in fourth quarter 2018. The Round Rock, Texas-based company’s market share fell from 18.8 percent to 15.7 percent year over year.
Dell still sold the most servers during the quarter at nearly 550,000 units; however, that number is down 5 percent compared to the 580,600 servers it shipped in fourth quarter 2018. The $US92-billion infrastructure giant unveiled on Monday that it will donate millions to fight the coronavirus – from upgrading IT infrastructure in China hospitals to $US3 million to fund front-line organizations fighting the worldwide pandemic.
1. Hewlett Packard Enterprise/New H3C Group
Market Share Q4 2019: 16.3%
HPE took home the gold for global server market share. The San Jose, Calif.-based company generated $US4.14 billion in server revenue, down 3 percent year over year. HPE was able to achieve market leadership even though its market share fell year over year from 18.2 percent to 16.3 percent. (Due to the existing joint venture between HPE and China-based H3C Group, IDC reports market share on a global level for HPE and New H3C Group as HPE/New H3C Group.)
Most notably, HPE shipped a total of 507,200 servers during the quarter, up 5 percent compared to the 484,700 servers it sold in the fourth quarter of 2018. In a recent interview with CRN, HPE CEO Antonio Neri said its recent quarterly earnings results show that HPE is besting rivals Dell and Cisco with “best-in-class” products and channel programs.
Market Share: 25.5%
Original design manufacturers (ODMs) continue to account for the largest market share for server revenue, although IDC combines all ODMs in terms of server revenue and share. ODMs design and manufacture servers that are later rebranded by other companies for sale.
The group of ODM vendors captured 25.5 percent market share in the fourth quarter, up from 19.9 percent share year over year. ODM server revenues hit nearly $US6.5 billion, up a whopping 38 percent compared to the $US4.7 billion in server sales in the fourth quarter of 2018.
When combining ODM server vendors, the group shipped a total of 1.05 billion units, representing a whopping 53 percent growth year over year. ODM servers made up 31 percent of the total amount of servers shipped worldwide in the fourth quarter.