STAMFORD, CT – In the second quarter, worldwide server shipments grew 4% year-over-year, while revenue declined 3.8% compared to the same quarter in 2012, says Gartner.

“The global server market remains in a relatively weak state overall,” said Jeffrey Hewitt, research vice president at Gartner. “The only real regional bright spot was Asia/Pacific with growth of 10% and 21.7% year-on-year in terms of revenue and shipments. Canada was the only other region that grew in both revenue and units (6.3% in revenue and 2.7% in units), while Latin America was close to flat for revenue but increased by 1% in terms of shipments. The US also grew in terms of shipments by 1.9% year-on-year but declined in revenue by 5.1%.

“x86 servers managed to produce an increase of 4.5% in units for the second quarter, and 2.1% in revenue. RISC/Itanium Unix servers continued to decline at 27.4% in units and 25.3% in vendor revenue compared to the same quarter last year. The ‘other’ CPU category, which is primarily mainframes, showed an increase of 6.9% in revenue,” Hewitt said.

IBM had the lead in the worldwide server market; the company posted worldwide server revenue of nearly $3.2 billion for a total share of 25.6% for the quarter.
In server shipments, HP remained the worldwide leader, in spite of a year-over-year shipment decline of 13.6% for the quarter. HP’s worldwide server shipment share was 23.9%, representing a 4.8% decrease in share from the same quarter in 2012.

Inspur also made it into the top five server position primarily due to a significant high-performance computing deal that it won in its native China during the quarter, says Gartner.

In terms of server form factors, x86 blade servers declined by 3% in shipments and 4.5% in revenue for the quarter. The x86 rack-optimized form factor climbed 3.9% in shipments and 2.4% in revenue.

In Europe, the Middle East and Africa (EMEA), server shipments surpassed 550,000 units in the second quarter, down 5.9% year-over-year. Server revenue totaled $3.1 billion, down 4.6% from the same quarter last year.

“Demand for servers in EMEA remained constrained in the second quarter,” said Adrian O’Connell, research director at Gartner. All three EMEA sub-regions saw server revenue decrease. In Western Europe, revenue declined 1.6%; in Eastern Europe, it fell 17.9%, and the Middle East and Africa region decreased 9%.

“This was the seventh consecutive quarter for shipment decline and the eighth consecutive quarter for revenue decline, showing an even more sustained period of weakness than the one we saw during the economic downturn that began in 2008,” said O’Connell.

Dell and Fujitsu remained the only two vendors from the top five to show revenue growth.

In the second quarter, x86 server revenue decreased 4.7% in EMEA, while RISC/Itanium UNIX revenue fell 22.6%. Revenue for the “other” CPU segment grew 44.3%. The RISC/Itanium UNIX segment continued to suffer from migrations to alternative platforms, as users sought lower cost alternatives and more flexibility, says the firm. The “other” CPU category, which is primarily driven by mainframes, saw a double-digit increase thanks to platform refreshes. In the second quarter, the market bifurcation continued with the RISC/Itanium UNIX segment decreasing as a proportion, while x86 servers kept extending their share.

“Weak enterprise demand, combined with consolidation and platform migration, continued to dampen the EMEA server market,” said O’Connell. ”In addition to weak demand, established vendors are increasingly challenged by relatively new vendors such as Cisco, Asia/Pacific-based suppliers such as Lenovo and Huawei, and original design manufacturers selling directly to large end-users.”

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