Advanced Computing in the Age of AI | Tuesday, March 19, 2024

HP Maintains Server Lead as Sales Growth Slows 

Hyper-scale datacenter deployments along with cloud service provider installations drove global server shipments during the fourth quarter of 2014, according to a market researcher.

Gartner Inc. reported Tuesday (March 3) that fourth quarter server shipments jumped 4.8 percent year-on-year as revenue grew 2.2 percent. For all of last year, Gartner said shipments rose a modest 2.2 percent, with revenue inching upward by 0.8 percent.

Hewlett-Packard continued to lead the global server market during the fourth quarter with a nearly 28 percent market share, followed by Dell (17.3 percent) and IBM (12.8 percent). Lenovo, which acquired IBM's x86 server business last year, grabbed nearly 8 percent of the global server market during the fourth quarter, Gartner reported.

The steady shift to hyper-scale datacenter operations and expansion by cloud service providers propelled the x86-based server market during the last quarter of 2014. Gartner noted that enterprises continued to consolidate physical servers via x86 virtualization as an alternative to boosting datacenter capacity. That trend is expected to continue as enterprises scale up their operations to compete with traditional hyper-scale service providers.

Regionally, the Middle East and Africa registered the highest growth rate for quarterly server shipments (10.7 percent) followed by the Asian Pacific region (9.1 percent) and North America (7.6 percent). As the server market begins to flatter in mature markets, upstarts like Lenovo have acknowledged they must find ways to boost sales in emerging markets, particularly China.

Server market leader HP posted only a 1.5 percent revenue gain year-on-year, Gartner noted, with quarterly revenues totaling nearly $3.9 billion. IBM's quarterly server sales plummeted after it closed the sale of its server business to Lenovo, which immediately recorded a 743 percent increase in quarterly revenues, making it the No. 4 server vendor in the world with a foothold in the emerging Asian market.

Compared to the year-ago quarter, HP's server shipments declined a hefty 11 percent, Gartner reported. "HP’s revenue increase compared with its shipment decline suggests a shift to sales of servers with richer configurations and relatively higher average selling prices to continue to support server consolidation through virtualization," the market watcher said. The decline also reflects a large number of HP hyper-scale deals at the likely height of the market in 2013.

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Gartner rated 2014 as a "relatively moderate growth year" for the global server market, with x86 servers remaining the dominant platform for hyper-scale datacenter deployments. For now, chip intellectual property vendor ARM Ltd. has made few inroads in the global server market despite HP's adoption last September of the U.K. chip designer's 64-bit architecture in its ProLiant Moonshot servers. HP touted the new servers as the first enterprise-class ARM-based servers targeting datacenters.

Meanwhile, Gartner forecast continuing "modest growth" in the global server market in 2015 as the growth of integrated systems contributes growth to the x86 server market. Continuing server consolidation via virtualization continues to be the wild card, likely making sales of new physical servers a harder sell in the coming year.

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