07 June 2017
With the rise of China-based suppliers, Gartner forecasts continued downward price pressure across the EMEA market.
The first quarter of the year saw global server revenues decline 4.5 per cent year-over-year, while shipments fell 4.2 per cent from the first quarter of 2016, according to Gartner.
Hewlett Packard Enterprise (HPE) continued to lead in the worldwide server market based on revenue. The company posted just more than $3 billion in revenue for a total share of 24.1 per cent for the first quarter of 2017.
Dell EMC maintained the number two position with 19 per cent market share. It was followed by IBM (6.6 per cent), Cisco (6.6 per cent), Lenovo (5.8 per cent), and various others (37.9 per cent).
Gartner says Dell EMC was the only vendor in the top five to experience growth in the first quarter of 2017, and also secured the number one position in server shipments in the first quarter of 2017 with 17.9 per cent market share.
Despite a decline of 16.7 per cent, HPE comes in second with 16.8 per cent of the market. Inspur Electronics experienced the highest growth in shipments with 27.3 per cent.
Specifically in Europe, the Middle East and Africa, server revenue totalled $2.8 billion in the first quarter, a decline of 12.2 per cent from Q1 2016. Server shipments totalled 503 thousand units, a decline of eight per cent year-over-year.
“The EMEA server market has started 2017 in the same way as 2016 ended,” says Adrian O’Connell, research director at Gartner. “The main challenge for vendors in the region is that increased levels of economic and political uncertainty are putting pressure on an already weak server market.”
As well as businesses buying fewer servers due to political and economic uncertainty, Gartner believes shifts toward hyperscale architectures mean service providers are increasingly buying lower-cost ‘white-box’ servers from original design manufacturers (ODMs). As a result, the decline in shipments in the ‘Others’ category at 1.4 per cent was lower than the top five, except Dell.
O’Connell reckons leading server vendors will be doing “all they can” to ensure that service providers don’t continue to shift their server purchases toward ODM suppliers.
“Combined with the significant inroads made by China-based suppliers, we expect to see continuing challenges and downward price pressure across the EMEA server market for some time to come,” he said.
Gartner adds that although purchases in the hyperscale data centre segment have been increasing, the enterprise and SMB segments remain constrained as end users in these segments accommodate their increased application requirements through virtualisation and consider cloud alternatives.
