Server revenue dips globally in Q1'16 despite shipments growth

BANGALORE, IDNIA: Worldwide server revenue declined 2.3 percent YoY in the first quarter of 2016, while shipments grew 1.7 percent from the first quarter of 2015, according to Gartner.

“The drop in revenues in light of shipment increases demonstrates that the servers that shipped during the period had lower average selling prices than those that shipped in the same time frame last year," said Jeffrey Hewitt, research vice president at Gartner.

"The real driver of global growth continues to be the hyperscale data center segment. The enterprise and small or midsize business (SMB) segments remain relatively flat as end users in these segments accommodated their increased application requirements through virtualization and considered cloud alternatives," said Hewitt.

All regions showed a decline in either shipments and/or vendor revenue except for Asia/Pacific, which posted 9.7 percent growth in revenue and 8.4 percent growth in shipments for the period.

Western Europe grew 1.4 percent in shipments and 1.5 percent in revenue. North America posted a 1 percent increase in shipments but declined 5.9 percent year over year in revenue.

Hewlett Packard Enterprise (HPE) continued to lead in the worldwide server market, based on revenue, with a 25.2 percent market share. HPE was the only vendor in the top five to experience growth in the first quarter of 2016. Despite a decline of 1.4 percent,

Dell maintained the second spot in the market with 17.3 percent market share.

IBM secured the third position with 9.7 percent of the market, but experienced the largest decline among the top five vendors.

In server shipments, HPE remained the worldwide leader in the first quarter of 2016, even with a year-over-year shipment decline of 1.6 percent. HPE's worldwide server shipment share was 19.4 percent, representing a 0.6 percent drop in share from the first quarter of 2015.

Of the top five vendors in server shipments worldwide, only Huawei and Inspur produced shipment increases.