NEW YORK -- First quarter server shipments declined 0.7% worldwide year-on-year, while revenue fell 5%, according to Gartner.

“The first quarter of 2013 was certainly not a strong period for the server market on a global level,” said Jeffrey Hewitt, research vice president. “The only regions to post increases were Asia/Pacific and the United States, with Asia/Pacific showing the strongest growth with shipment and revenue increases of 7%  and 1.7%, respectively. While these two regions grew in both shipments and revenue, it was not enough to offset the declines of the other geographies -- all of which declined in server shipments and revenue for the quarter.”

“x86 server shipment growth was flat in the quarter, while revenue increased 1.8%. RISC/Itanium Unix servers declined globally for the period, down 38.8% in shipments and down 35.8%  in vendor revenue compared to the same quarter last year. The ‘other’ CPU category, which is primarily mainframes, exhibited an increase of 3.6% in worldwide revenue.”

IBM had the lead in the worldwide server market based on revenue. The company totaled just over $3 billion in server vendor revenue worldwide, with a total share of 25.5% in the  quarter, down 2.5 percentage points from the same period in 2012. In the first quarter, system x accounted for 29.3% of IBM’s total server revenue.

All the top five vendors suffered revenue declines in the quarter except for Dell, which grew 14.4%.

Table 1. Worldwide: Server Vendor Revenue Estimates, 1Q13 (US Dollars)

Source: Gartner (May 2013)

In server shipments, HP remained the worldwide leader in the first quarter despite a year-on-year shipment decline of 15.2%. Dell and Cisco were the only vendors in the top five to have positive shipment growth, with increases of 2.6%  and 33%.

In terms of server form factors, blade servers fell 5.9% in shipments and 5% in revenue. Rack-optimized form factor dropped 5.2%  in shipments and 2% in revenue in the first quarter.

Table 2. Worldwide: Server Vendor Shipments Estimates, 1Q13 (Units)

Source: Gartner (May 2013)

In Europe, the Middle East and Africa (EMEA) server shipments surpassed 580,000 units in the first quarter of 2013, a decrease of 6.8% from last year. Server revenue totaled $2.96 billion, a decline of 9.6% from the first quarter last year.

"Following a challenging 2012, 2013 started in very much the same way," said Adrian O'Connell, research director at Gartner. "Budgets are restricted and server infrastructure spending is clearly not the highest priority for many organizations."

Each of the three EMEA subregions suffered a contraction in server revenue in the first quarter of 2013: in Western Europe revenue declined 9.6%, in Eastern Europe it fell 9.4%, and in the Middle East and Africa it decreased 13.4%.

In the first quarter of 2013, x86 server revenue increased 1.8%. RISC/Itanium Unix server revenue declined 54.8% due to migrations to alternative platforms by users seeking lower-cost alternatives and more flexibility. Revenue in the Other CPU segment dropped 9.9% following growth in the fourth quarter of 2012.

Dell and Fujitsu were the only server vendors to exhibit revenue growth in EMEA. The market environment remains difficult for all vendors, but those most exposed to the enterprise customer segment face the biggest challenges.

It will be little consolation to vendors in EMEA that this region did not deliver the worst performance of the quarter, as Japan experienced a 19% decline. Asia/Pacific and US  were the only regions to show growth.

"The reality for server vendors is that spending levels are very low and there is severe weakness in the high-end segment. There are still areas of opportunity, but vendors need to be agile and focused on addressing them. The outlook for 2013 remains challenging," O'Connell said.

Table 3. EMEA: Server Vendor Revenue Estimates, 1Q13 (US Dollars)

Source: Gartner (May 2013)

Table 4. EMEA: Server Vendor Shipments Estimates, 1Q13 (Units)

Source: Gartner (May 2013)

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