Dell, Cisco Pummel Competition In 1Q Server Market: Gartner


 

2013 Server Data

 

 

 

The server industry is heading for a shakeup as Dell, Cisco and the original design manufacturing vendors take major market share away from the traditional market leaders Hewlett-Packard, IBM and Oracle.

Worldwide server shipments fell in the first quarter 2013 by 0.7 percent, while revenue fell 5 percent, compared to the first quarter of 2012, according to Gartner, which on Tuesday released its quarterly server sales report.

Dell, as predicted in earlier CRN reports, was the big winner, with total server shipments for the quarter up 2.6 percent and total server revenue up 14.4 percent, bringing the company to within striking distance of No. 1 vendor HP.

 

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However, for sheer growth, the prize this quarter goes to Cisco, which saw server revenue grow by 34.3 percent over last year, and by the server self-build and ODM vendors which saw shipments grow by 34.7 percent and revenue by 34.5 percent, Gartner said.

The self-build and ODM category includes such ODM vendors as Quanta, Wistron Wiwynn and Synnex's Hyve solutions, as well as self-build companies in the cloud infrastructure space such as Facebook and Google.

The share shift comes at a time when the server industry as a whole is experiencing a drop due to three trends, said Jeffrey Hewitt, research vice president at Gartner.

The first is economics. Gartner said that the poor economic condition in Europe took a toll on server sales, which in the first quarter fell 9.6 percent in terms of revenue and 6.8 percent in terms of shipments.

"The server market is typically a trailing indicator of economic conditions," Hewitt said. "Asia-Pacific-Japan is growing the strongest, while the U.S. is showing some signs of growth."

The second trend is the strong growth of virtualization, which is letting businesses run increasingly more virtual machines with increasingly higher performance on ever fewer physical servers, Hewitt said.

The third is outsourcing and the cloud. "Small businesses are looking at what's happening with outsourcing and the cloud, and are saying, 'Hmmm, I gotta look at this,'" he said.

HP is still the largest server vendor in terms of shipments, while IBM keeps its title as the largest server vendor in terms of revenue, Gartner reported.

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