Circuits Assembly Online Magazine - Server Revenue, Shipments Going Opposite Directions

FRAMINGHAM, MA – Server sales from factories worldwide fell 4.4% year-over-year to $14.2 billion in the fourth quarter, the fourth consecutive quarter of year-over-year revenue declines. Server demand remained weak ahead of a forthcoming refresh cycle, which is expected to emerge in early 2014, said International Data Corp.

Worldwide server shipments increased 8.2% to 2.5 million units over same year-ago period. For 2013, worldwide server revenue decreased 4.4% to $49.7 billion, while worldwide unit shipments increased 3.2% to 9 million units, a record high.

On a year-over-year basis, volume systems experienced 8% revenue growth to $10.2 billion in the quarter, IDC said. Demand for midrange and high-end systems experienced sharp year-over-year revenue declines of 19.6% and 28.5% to $1.2 billion and $2.8 billion, respectively. The volume segment was aided by a continued expansion of x86-based hyperscale server infrastructures.

"While a record number of servers shipped in 4Q13, the market was constrained by weak demand for midrange and high-end systems. The market continues to be impacted by enterprise focus on 2nd platform workload consolidation, which at this point in time is only partially offset by 3rd Platform hyperscale server deployments around the globe," said Matt Eastwood, group vice president and general manager, Enterprise Platforms at IDC. "2nd Platform workloads continue to represent a healthy profit pool for server vendors targeting consolidation opportunities across the market. However, new profit pools in the 3rd Platform are emerging that create new market opportunities for OEMs and ODMs. IDC believes this market transformation requires increased focus from vendors in order to best capitalize on these diverging market trends."

Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, Q4

Vendor	4Q13 Revenue	4Q13 Market Share	4Q12 Revenue	4Q12 Market Share	4Q13/4Q12 Revenue Growth
1. HP*	$3,832	26.9%	$3,626	24.3%	5.7%
1. IBM*	$3,820	26.8%	$5,344	35.9%	-28.5%
3. Dell	$2,058	14.5%	$2,109	14.2%	-2.4%
4. Cisco*	$646	4.5%	$480	3.2%	34.5%
4. Oracle*	$589	4.1%	$602	4.0%	-2.2%
ODM Direct	$907	6.4%	$616	4.1%	47.3%
Others	$2,389	16.8%	$2,116	14.2%	12.9%

All Vendors	$14,242	100%	$14,893	100%	-4.4%

In $ millions

Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, 2013

Vendor	2013 Revenues	2013 Market Share	2012 Revenues	2012 Market Share	2013/2012 Revenue Growth
1. HP	$13,240	26.6%	$14,149	27.2%	-6.4%
2. IBM	$12,746	25.6%	$15,749	30.3%	-19.1%
3. Dell	$8,275	16.6%	$8,057	15.5%	2.7%
4. Oracle*	$2,329	4.7%	$2,660	5.1%	-12.4%
4. Cisco*	$2,232	4.5%	$1,610	3.1%	38.7%
ODM Direct	$2,816	5.7%	$1,790	3.4%	57.3%
Others	$8,085	16.3%	$8,013	15.4%	0.9%

All Vendors	$49,722	100%	$52,028	100%	-4.4%