IDC: Public Cloud Giants Push Server Business Recovery; Legacy Vendors See Mixed Results

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IDC broke out Supermicro server sales for the first time in this report, estimating that the company sold $448 million worth of servers for a 2.9 percent market share. Sales were up 49.8 percent year-over-year, IDC said.

The biggest part of the overall server market was the ODM direct sector where sales reached $3.5 billion, up 48.1 percent over last year, IDC estimated. The "other" vendors accounted for 21.9 percent of the market, or $3.3 billion in revenue, which was up 10.2 percent over last year, IDC said.

Dell EMC's significant growth in the server market vs. that of its server vendor peers was no surprise to Paul Clifford, president of Davenport Group, a St. Paul-based solution provider and long-term Dell EMC channel partner.

While server vendors tend to leap-frog each other in terms of technology, Dell EMC has consistently offered the best technology, Clifford told CRN. "Good technology is table stakes in this business," he said. "But this strategy works well for Dell EMC."

More important to Dell EMC's growth, however, is the addition of legacy EMC sales reps to the Dell server business in the wake of Dell's huge acquisition of EMC, which closed just over a year ago, Clifford said.

"Dell has always had a strong sales force for its servers," Clifford said. "But when EMC sales reps came over, they were not focused on selling corporate compute. If they were, they were likely pushing Cisco servers. But they're not pushing Cisco anymore. They are focused on Dell. So the Dell EMC growth is no surprise to me."

Hyper-scale data center businesses as a group made a significant deployment push in the second quarter, said Kuba Stolarski, research director for computing platforms at IDC, in a statement.

"As hyperscalers tend to lead the market on most architectural updates, we expect the rest of the market to catch up over the next several quarters. As the market cycles through this refresh, we are seeing changes in vendor portfolios with new modular system designs and a greater focus on accelerator technologies, as well as the continued evolution of the role of cloud services in corporate IT," Stolarski said.


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