MUMBAI, INDIA: Server shipments in Asia Pacific grew 15.7 per cent year-on-year in the fourth quarter of 2011, while revenue increased 2.4 per cent from the same quarter last year, according to Gartner, Inc.
“Asia Pacific was the fastest growing region for server shipments during the fourth quarter of 2011, with China as the main growth engine, supported by the continued momentum of data centre built out,” said Gartner principal analyst Erica Gadjuli. “Most major economies in Asia Pacific performed better than the rest of the world, which encouraged IT spending during 2011.”
During the fourth quarter, the x86 server market in Asia Pacific continued similar positive sales trends as observed in the previous quarter, despite some issues with hard-disk drive (HDD) inventory shortage because of the Thailand floods in October 2011.
Revenue from x86 servers grew 18 per cent year-on-year, and shipments were up 17 per cent. The x86-based server sales represented 98 per cent of total shipments in Q4 of 2011 whilst revenue share increased to account for 67 per cent in this quarter, compared to 58 per cent in Q4 2010 and 62 per cent in the previous quarter. The strength of this segment was driven by enterprise buying preferences favouring richer configurations of rack optimised and blade servers.
Meanwhile the mainframe platform and RISC/ IA64 Unix servers saw revenues decline by 56 per cent and 5 per cent respectively, after positive performances in the previous three quarters of 2011. Furthermore, there was a global weakness in RISC/Itanium Unix servers shipments.
Country performance in Q4
Server shipments to China were up 27 per cent from the fourth quarter of 2010 and revenue increased 17 per cent year on year. For the same quarter, server shipped to Hong Kong increased 34 per cent year-on-year, but revenue fell at 6 per cent rate. On the other hand, the server market in Taiwan ended weaker than in Q4 2010, in both shipments and revenue, as they declined 14 per cent and 5 per cent respectively.
Singapore, as one of the mature markets in this region, had server shipments decline 6 per cent during the fourth quarter and revenue was also down 7 per cent year on year. Consistent growth of x86 servers in Korea continued in this quarter and helped the overall server shipment volume to grow 16 per cent but revenue declined 9 per cent with the lack of contribution from other server platforms, namely mainframe, RISC, and Itanium based servers.
In Malaysia, revenue from all server categories by CPU type except mainframe class servers declined year-on-year, which also led to a slowdown of 6 per cent in overall revenue in Q4 2011 compared to Q4 2010. Lastly, server market performance in Australia was generally weaker across all server platforms, finishing at 10 per cent lower year-on-year in shipments and 39 per cent in revenue.
Vendor performance in Q4
“In this region, blade server revenue continued to grow the fastest compared to other form factors,” Gadjuli said. Blade servers (x86 and non x86) expanded in revenue by 15 per cent year on year. HP continued to lead this market segment with 45 per cent of total blade revenue in Q4 2011 and 32 per cent share of shipments. However, Dell, in third place in the blade market, firmed up its share of both shipments and revenue, accounting for 11 per cent and 9 per cent respectively, up from 8 per cent and 6 per cent in Q4 2010.
Cisco accelerated its penetration of the server market in Asia Pacific by pushing its USC blade product in 2011.
IBM continued its revenue leadership, accounting for 40 per cent market share despite experiencing a decline of 3 per cent year-on-year due to the lack of contribution from mainframe platform during Q4 2011. Compared with the same quarter of 2010, HP saw revenue decline 14 per cent, mainly because of a slowdown in demand for its x86 servers, partly resulting from the HDD shortage issue, and Itanium based servers.
On the other hand, server revenue from Dell grew reasonably strongly, up 28 per cent year-on-year, fueled by significant take up in blade servers.
Full Year 2011 Server Market Results
Tables 3 and 4 show that double digit growth of the server market in Asia Pacific continued in 2011, registering an increase of 21.3 per cent in shipments and 17.7 per cent in revenue from one year ago. The x86 servers remained as the catalyst for server growth as spending on this platform grew consistently since the first quarter of 2011.
The majority of the sales were motivated by data centre build out and increased configuration of virtual servers, not just in mature markets but also spreading into emerging markets. Virtualization drove demand for higher configurations in the rack optimised and blade segments.
IBM led the server market in revenue terms, maintaining its 40 per cent market share in 2011 with the company successfully growing its revenue from Power System servers (RISC based) and System x (x86 based) in the double digits. Dell has steadily gained ground in both revenue and shipments for the past five years in Asia Pacific, thanks to the growing demand for the two and four socket blades and rack servers.
“For blade servers in particular, we saw mature markets such as Australia, Hong Kong, Korea and Singapore displayed much faster uptake than one year ago,” said Gadjuli. “In 2011, the emerging markets like China and some countries in the ASEAN sub-region contributed significantly to blade server revenue in Asia Pacific. Overall, blade servers grew 17 per cent in shipments and 30 per cent in revenue.”