The worldwide server business is growing with volume purchasing from large public cloud providers moving the needle considerably, according to the latest data from analyst firm IDC.
IDC on Tuesday said worldwide server business grew to $15.7 billion in the second quarter of 2017, a 6.3 percent increase over the year-ago quarter. Server shipments increased during the same period by 1.9 percent to 2.45 million units.
A big sales driver, after several quarters of slow sales, was the availability of Intel's new Skylake processors, IDC said. Intel in July rolled out its new Intel Xeon Scalable Platform, or "Skylake," processors, based on its Purley architecture, and stated that they are aimed at helping customers and partners find new ways to transform data centers to meet the requirements of new cloud, networking and artificial intelligence applications.
However, despite the growth of the server business overall, the results were mixed for traditional server vendors.
What IDC calls "ODM direct" and "others" represented hyper-scale data center providers and cloud data center providers who purchase low-cost server hardware in large volumes. One such customer, Amazon, accounted for over 10 percent of servers shipped on a volume basis, IDC said.
For the quarter, the leading vendor in server revenue was Hewlett-Packard Enterprise, which sold $3.3 billion worth of servers in the quarter for a 21.3 percent share of the total market. IDC reported that revenue from HPE and New H3C Group, which is an HPE joint venture in China, fell 8.4 percent compared to last year.
Dell EMC had second quarter server revenue of $2.8 billion, giving it a market share of 17.7 percent. Dell EMC was the only top vendor to show significant growth during the quarter, with sales up by 7 percent over last year.
IBM had sales of $1.0 billion. That represented a huge 20.8 percent drop over last year as the server market increasingly turned to x86-based servers. IDC estimated demand for x86 servers increased 10.4 percent in the second quarter while that of non-x86 servers declined 21.5 percent during the same period.
Cisco had second quarter server sales totaling $874.0 million, according to IDC, giving the company a 6.6 percent market share. That represented a moderate 1.7 percent rise in server sales compared to last year.
Lenovo had server sales of $834.1 million, a 13.9 percent drop from the second quarter of 2016, IDC reported.