Welcome!

Open Source Authors: Carmen Gonzalez, Trevor Parsons, Dmitriy Stepanov, Lacey Thoms, Yeshim Deniz

News Feed Item

Worldwide Server Market Rebounds Sharply in Fourth Quarter as Demand for x86 Servers and High-end Systems Leads the Way, According to IDC

According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market increased 3.1% year over year to $14.6 billion in the fourth quarter of 2012 (4Q12). This was the first quarterly increase of factory revenue in five quarters. Worldwide server shipments decreased 3.9% to 2.1 million units in 4Q12 when compared with the same period in 2011. For the full year 2012, worldwide server revenue decreased 1.9% to $51.3 billion when compared to 2011, while worldwide unit shipments decreased 1.5% year over year to 8.1 million units.

On a year-over-year basis, volume systems and high-end systems experienced 4.2% and 6.4% revenue growth to $9.1 billion and $4.1 billion respectively in 4Q12. At the same time, demand for midrange systems experienced a year-over-year revenue decline of 10.0% to $1.5 billion in 4Q12. The volume segment and high-end systems were both buoyed by a favorable technology refresh cycle with volume systems benefiting from continued demand for x86 servers deployed as part of consolidation and virtualization initiatives while increased spending for high-end systems was helped by strong demand for IBM System z mainframes.

"Despite experiencing the first quarterly growth in factory revenue in over a year, the server market continued to show signs of lumpiness in the fourth quarter," said Matt Eastwood, group vice president and general manager, Enterprise Platforms at IDC. "IDC forecasted that server demand would begin to improve in the second half of 2012 following a number of critical product refreshes which occurred in the first half of the year. While this did happen in the fourth quarter, market demand was uneven with the U.S., Asia/Pacific and Latin America all experiencing sharp growth, while demand in all other regions remained soft. Average selling prices for servers increased sharply in the quarter as large and small enterprises continued to invest heavily in new server capacity to drive additional consolidation and virtualization initiatives."

Overall Server Market Standings, by Vendor

IBM held onto the number 1 spot in the worldwide server systems market with 36.5% market share in factory revenue for 4Q12, as revenue increased 3.1% year over year. IBM experienced significant improvements in demand for its System z mainframes aided by a strong product refresh cycle. The fourth quarter also delivered the highest quarterly revenue IBM has achieved in System z in more than a decade. HP held the number 2 spot with 24.8% share for the quarter as revenue decreased 3.2% compared to 4Q11. Although HP experienced solid demand for its x86-based ProLiant servers, it was offset by weak Itanium-based Integrity server demand in the quarter. Dell increased server revenue by 5.7% year over year and maintained third place with 15.1% factory revenue market share in 4Q12. Three companies shared the number 4 market position, with Oracle, Fujitsu and Cisco all locked in a statistical tie* in 4Q12. Additionally, this was the first quarter that Cisco maintained a position in the top 5 server rankings.

Top Server Market Findings

  • Linux server demand was positively impacted by high performance computing (HPC) and cloud infrastructure deployments, as hardware revenue improved 12.7% year over year in 4Q12 to $3.0 billion. Linux servers now represent 20.4% of all server revenue, up 1.7 points when compared with the fourth quarter of 2011.
  • Microsoft Windows server demand continued to increase in 4Q12 as hardware revenue increased 3.2% year over year. Quarterly revenue of $6.7 billion for Windows servers represented 45.8% of overall quarterly factory revenue, the same share as in the prior year's quarter.
  • Unix servers experienced a revenue decline of 24.1% year over year to $2.6 billion representing 17.6% of quarterly server revenue. This was the sixth consecutive quarter of revenue decline in the Unix server market and all major Unix server vendors experienced a revenue decline when compared with the fourth quarter of 2011.
  • After five consecutive quarters of revenue declines, IBM's System z mainframe running z/OS increased revenue 55.6% year over year to $1.8 billion, representing 12.3% of all server revenue in 4Q12.

"The IBM System z mainframe platform had its highest quarterly revenue since 1997, generating nearly $2 billion and driving the overall server market to positive growth in the quarter," said Jean S. Bozman, Research Vice President in IDC's Enterprise Platforms Group. "This dramatic growth was due to several factors: technology refresh, new products such as zEnterprise, new accounts in emerging economies, and consolidation of some enterprise Linux workloads onto IBM System z, using the Integrated Facility for Linux (IFL) specialty engines. Although revenue results for System z are traditionally heavier in the fourth quarter, this accelerated acquisition shows the breadth and depth of the IBM mainframe installed base."

X86 Industry Standard Server Market Dynamics

The x86 server market experienced sharp revenue growth in 4Q12 as systems based on Intel's Sandy Bridge processor -- which was launched in early 2012 -- experienced strong demand which helped drive sharply higher average selling prices across the market. The x86 server market accelerated in 4Q12, increasing 6.0% in the quarter to $9.7 billion worldwide as unit shipments decreased 3.7% to 2.1 million servers. Despite the shipment decline, this is the highest quarterly revenue ever reported for x86 servers as the architecture accounted for 66.2% of all server spending. HP's x86 factory revenue increased 4.4% and it continued to lead the market with 32.7% revenue share. Dell experienced 5.7% year-over-year growth in x86 server revenue and retained second place with 22.9% revenue share. IBM continues to hold third place with 16.7% x86 server revenue share following a 2.3% year-over-year decline in revenue. Cisco moved into the fourth position in the market with 5.0% revenue share as a result of 50.7% revenue growth when compared to 4Q11, while Fujitsu and Oracle tied* for fifth position with 3.1% and 2.7% share respectively. As a result of a strong demand throughout the year, worldwide x86 server revenue for 2012 increased 4.1% to $35.8 billion, while worldwide x86 unit shipments decreased 0.4% to 8.0 million units.

Modular Form Factor Market Results

Servers in the modular form factor categories performed well in 4Q12. There are two types of modular form factors, each with a distinct use case. Blade servers, which are highly leveraged in enterprises' virtualized environments, grew 3.3% year over year to $2.4 billion. Blades now account for 16.3% of total server revenue. HP maintained the number 1 spot in the blade server market in 4Q12 with 44.7% revenue share; IBM and Cisco followed in second and third with 21.7% and 15.3% revenue share, respectively.

Density Optimized servers, utilized by large datacenters, experienced very strong demand in 4Q12. Revenue grew 66.4% year over year in 4Q12 to $705 million as unit shipments increased 44.2% to just over 192,000 servers. Density Optimized servers now represent 4.8% of all server revenue and 9.2% of all server shipments. Dell maintained the number 1 spot in the Density Optimized segment in 4Q12 with 50.8% revenue share. IBM and HP finished second and third in revenue share with 12.8% and 9.1%, respectively.

"Both types of modular form factors outperformed the overall server market, indicating customers are increasingly favoring specialization in their server designs," said Jed Scaramella, research manager, Enterprise Servers. "Density Optimized servers were positively impacted by the growth of service providers in the market. In addition to HPC, Cloud and IT service providers favor the highly efficient and scalable design of Density Optimized servers. Blade servers are being leveraged in enterprises' virtualized and private cloud environments. IDC is observing an increased interest from the market for converged systems, which use blades as the building block. Enterprise IT organizations are viewing converged systems as a method to simplify management and increase their time to value."

 

Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, Fourth Quarter of 2012

(Revenues are in Millions)

Vendor    

4Q12
Revenue

   

4Q12 Market
Share

   

4Q11
Revenue

   

4Q11 Market
Share

   

4Q12/4Q11
Revenue
Growth

1. IBM     $5,343     36.5%     $5,180     36.5%     3.1%
2. HP $3,626 24.8% $3,747 26.4% -3.2%
3. Dell $2,218 15.1% $2,098 14.8% 5.7%
4. Oracle* $602 4.1% $733 5.2% -17.8%
4. Fujitsu* $501 3.4% $476 3.4% 5.3%
4. Cisco* $480 3.3% $319 2.2% 50.7%
Others $1,869 12.8% $1,641 11.6% 13.9%
 
All Vendors $14,639 100% $14,193 100% 3.1%
 

IDC's Worldwide Quarterly Server Tracker, February 2013

* Note: IDC declares a statistical tie in the worldwide server market when there is less than one percent difference in the revenue share of two or more vendors.

In addition to the table above, a graphic showing 4Q12 market share for the top 5 vendors in the worldwide market as well as in emerging and mature markets is available at IDC.com. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

 

Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, Full Year 2012

(Revenues are in Millions)

Vendor    

2012
Revenue

   

2012 Market
Share

   

2011
Revenue

   

2011 Market
Share

   

2012/2011
Revenue
Growth

1. IBM     $15,748     30.7%     $16,454     31.5%     -4.3%
2. HP $14,149 27.6% $15,300 29.3% -7.5%
3. Dell $8,165 15.9% $7,814 15.0% 4.5%
4. Oracle $2,660 5.2% $3,218 6.2% -17.4%
5. Fujitsu* $2,070 4.0% $2,492 4.8% -16.9%
5. Cisco* $1,610 3.1% $1,020 2.0% 57.9%
Others $6,873 13.4% $5,951 11.4% 15.5%
 
All Vendors $51,276 100% $52,249 100% -1.9%
 

IDC's Worldwide Quarterly Server Tracker, February 2013

* Note: IDC declares a statistical tie in the worldwide server market when there is less than one percent difference in the revenue share of two or more vendors.

IDC's Server Taxonomy

IDC's Server Taxonomy maps the eleven price bands within the server market into three price ranges: volume servers, midrange servers and high-end servers. The revenue data presented in this release is stated as factory revenue for a server system. IDC presents data in factory revenue to determine market share position. Factory revenue represents those dollars recognized by multi-user system and server vendors for ISS and upgrade units sold through direct and indirect channels and includes the following embedded server components: Frame or cabinet and all cables, processors, memory, communications boards, operating system software, other bundled software and initial internal and external disk shipments.

IDC's Worldwide Quarterly Server Tracker is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly shipments (both ISS and upgrades) and revenues (both customer and factory), segmented by vendor, family, model, region, operating system, price band, CPU type, and architecture. For more information, please contact Lidice Fernandez at 305-351-3051 or [email protected].

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app, available at iTunes, allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 49 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of their respective holders.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Noted IoT expert and researcher Joseph di Paolantonio (pictured below) has joined the @ThingsExpo faculty. Joseph, who describes himself as an “Independent Thinker” from DataArchon, will speak on the topic of “Smart Grids & Managing Big Utilities.” Over his career, Joseph di Paolantonio has worked in the energy, renewables, aerospace, telecommunications, and information technology industries. His expertise is in data analysis, system engineering, Bayesian statistics, data warehouses, business intelligence, data mining, predictive methods, and very large databases (VLDB). Prior to DataArcho...
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce the value of the network in helping organizations to maximize their company’s cloud experience.
Disruptive macro trends in technology are impacting and dramatically changing the "art of the possible" relative to supply chain management practices through the innovative use of IoT, cloud, machine learning and Big Data to enable connected ecosystems of engagement. Enterprise informatics can now move beyond point solutions that merely monitor the past and implement integrated enterprise fabrics that enable end-to-end supply chain visibility to improve customer service delivery and optimize supplier management. Learn about enterprise architecture strategies for designing connected systems tha...
IoT is still a vague buzzword for many people. In his session at Internet of @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, will discuss the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. The presentation will also discuss how IoT is perceived by investors and how venture capitalist access this space. Other topics to discuss are barriers to success, what is new, what is old, and what the future may hold.
Whether you're a startup or a 100 year old enterprise, the Internet of Things offers a variety of new capabilities for your business. IoT style solutions can help you get closer your customers, launch new product lines and take over an industry. Some companies are dipping their toes in, but many have already taken the plunge, all while dramatic new capabilities continue to emerge. In his session at Internet of @ThingsExpo, Reid Carlberg, Senior Director, Developer Evangelism at salesforce.com, to discuss real-world use cases, patterns and opportunities you can harness today.
All major researchers estimate there will be tens of billions devices – computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be!
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation and integration; and visibility through intelligent business operations and big data.
There will be 50 billion Internet connected devices by 2020. Today, every manufacturer has a propriety protocol and an app. How do we securely integrate these "things" into our lives and businesses in a way that we can easily control and manage? Even better, how do we integrate these "things" so that they control and manage each other so our lives become more convenient or our businesses become more profitable and/or safe? We have heard that the best interface is no interface. In his session at Internet of @ThingsExpo, Chris Matthieu, Co-Founder & CTO at Octoblu, Inc., will discuss how thes...
Last week, while in San Francisco, I used the Uber app and service four times. All four experiences were great, although one of the drivers stopped for 30 seconds and then left as I was walking up to the car. He must have realized I was a blogger. None the less, the next car was just a minute away and I suffered no pain. In this article, my colleague, Ved Sen, Global Head, Advisory Services Social, Mobile and Sensors at Cognizant shares his experiences and insights.
We are reaching the end of the beginning with WebRTC and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) ir...
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT. Attendees will learn rea...
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at Internet of @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, will share some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder ...
The Internet of Things (IoT) promises to create new business models as significant as those that were inspired by the Internet and the smartphone 20 and 10 years ago. What business, social and practical implications will this phenomenon bring? That's the subject of "Monetizing the Internet of Things: Perspectives from the Front Lines," an e-book released today and available free of charge from Aria Systems, the leading innovator in recurring revenue management.
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges.
There’s Big Data, then there’s really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at 6th Big Data Expo®, Hannah Smalltree, Director at Treasure Data, to discuss how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other mach...
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at Internet of @ThingsExpo, Erik Lagerway, Co-founder of Hookflash, will walk through the shifting landscape of traditional telephone and voice s...
While great strides have been made relative to the video aspects of remote collaboration, audio technology has basically stagnated. Typically all audio is mixed to a single monaural stream and emanates from a single point, such as a speakerphone or a speaker associated with a video monitor. This leads to confusion and lack of understanding among participants especially regarding who is actually speaking. Spatial teleconferencing introduces the concept of acoustic spatial separation between conference participants in three dimensional space. This has been shown to significantly improve comprehe...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, will discuss single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example...