Welcome!

Virtualization Authors: Liz McMillan, Vormetric Blog, Michael Jannery, Elizabeth White, Carmen Gonzalez

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.
Things are being built upon cloud foundations to transform organizations. This CEO Power Panel at 15th Cloud Expo, moderated by Roger Strukhoff, Cloud Expo and @ThingsExpo conference chair, addressed the big issues involving these technologies and, more important, the results they will achieve. Rodney Rogers, chairman and CEO of Virtustream; Brendan O'Brien, co-founder of Aria Systems, Bart Copeland, president and CEO of ActiveState Software; Jim Cowie, chief scientist at Dyn; Dave Wagstaff, VP and chief architect at BSQUARE Corporation; Seth Proctor, CTO of NuoDB, Inc.; and Andris Gailitis, C...
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Performance is the intersection of power, agility, control, and choice. If you value performance, and more specifically consistent performance, you need to look beyond simple virtualized compute. Many factors need to be considered to create a truly performant environment. In his General Session at 15th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, discussed how to take advantage of a multitude of compute options and platform features to make cloud the cornerstone of your online presence.
SYS-CON Media announced that Splunk, a provider of the leading software platform for real-time Operational Intelligence, has launched an ad campaign on Big Data Journal. Splunk software and cloud services enable organizations to search, monitor, analyze and visualize machine-generated big data coming from websites, applications, servers, networks, sensors and mobile devices. The ads focus on delivering ROI - how improved uptime delivered $6M in annual ROI, improving customer operations by mining large volumes of unstructured data, and how data tracking delivers uptime when it matters most.
In this Women in Technology Power Panel at 15th Cloud Expo, moderated by Anne Plese, Senior Consultant, Cloud Product Marketing at Verizon Enterprise, Esmeralda Swartz, CMO at MetraTech; Evelyn de Souza, Data Privacy and Compliance Strategy Leader at Cisco Systems; Seema Jethani, Director of Product Management at Basho Technologies; Victoria Livschitz, CEO of Qubell Inc.; Anne Hungate, Senior Director of Software Quality at DIRECTV, discussed what path they took to find their spot within the technology industry and how do they see opportunities for other women in their area of expertise.
DevOps Summit 2015 New York, 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 it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
SYS-CON Media announced that Cisco, a worldwide leader in IT that helps companies seize the opportunities of tomorrow, has launched a new ad campaign in Cloud Computing Journal. The ad campaign, a webcast titled 'Is Your Data Center Ready for the Application Economy?', focuses on the latest data center networking technologies, including SDN or ACI, and how customers are using SDN and ACI in their organizations to achieve business agility. The Cisco webcast is available on-demand.
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
“The age of the Internet of Things is upon us,” stated Thomas Svensson, senior vice-president and general manager EMEA, ThingWorx, “and working with forward-thinking companies, such as Elisa, enables us to deploy our leading technology so that customers can profit from complete, end-to-end solutions.” ThingWorx, a PTC® (Nasdaq: PTC) business and Internet of Things (IoT) platform provider, announced on Monday that Elisa, Finnish provider of mobile and fixed broadband subscriptions, will deploy ThingWorx® platform technology to enable a new Elisa IoT service in Finland and Estonia.
Advanced Persistent Threats (APTs) are increasing at an unprecedented rate. The threat landscape of today is drastically different than just a few years ago. Attacks are much more organized and sophisticated. They are harder to detect and even harder to anticipate. In the foreseeable future it's going to get a whole lot harder. Everything you know today will change. Keeping up with this changing landscape is already a daunting task. Your organization needs to use the latest tools, methods and expertise to guard against those threats. But will that be enough? In the foreseeable future attacks w...
As enterprises move to all-IP networks and cloud-based applications, communications service providers (CSPs) – facing increased competition from over-the-top providers delivering content via the Internet and independently of CSPs – must be able to offer seamless cloud-based communication and collaboration solutions that can scale for small, midsize, and large enterprises, as well as public sector organizations, in order to keep and grow market share. The latest version of Oracle Communications Unified Communications Suite gives CSPs the capability to do just that. In addition, its integration ...
Building low-cost wearable devices can enhance the quality of our lives. In his session at Internet of @ThingsExpo, Sai Yamanoor, Embedded Software Engineer at Altschool, provided an example of putting together a small keychain within a $50 budget that educates the user about the air quality in their surroundings. He also provided examples such as building a wearable device that provides transit or recreational information. He then reviewed the resources available to build wearable devices at home including open source hardware, the raw materials required and the options available to power s...
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
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 @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, shared 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 of TeleStax, a...

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...

We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
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...
SYS-CON Events announced today that CodeFutures, a leading supplier of database performance tools, has been named a “Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. CodeFutures is an independent software vendor focused on providing tools that deliver database performance tools that increase productivity during database development and increase database performance and scalability during production.