FRAMINGHAM, MA – Worldwide factory revenue from the sale of servers increased 17.2% year-over-year to $12.8 billion in the first quarter, the fourth consecutive quarter of year-over-year growth.

Revenue grew in all form factors, including rack-optimized, blade, density-optimized, and tower. Worldwide server shipments totaled 2.3 million units in the period, up 8.4% compared with 2014.

On a year-over-year basis, volume system revenue increased 13.6% and midrange system demand increased 7.2% in the March period to $9.7 billion and $1.0 billion, respectively. The volume segment was aided by a continued expansion of x86-based hyper-scale server infrastructures while midrange systems were helped by enterprise investment in scalable systems for virtualization and consolidation. Meanwhile, demand for high-end systems rose 44.7% year-over-year to $2.1 billion, bolstered by IBM's z13 refresh.

"We continue to see a market profile that is increasingly driven by new compute deployment scenarios, often in hyperscale datacenters. These customers tend to buy in large contracts, creating considerable variability within any given quarter, with this variability usually associated with density-optimized server products," said Al Gillen, Program Vice President, Servers and System Software at IDC. "Shipments of density-optimized servers tend to land in a given region in a given quarter, and either in a different region, or not at all, in the subsequent quarter. This leads to a relatively unpredictable profile. This was true in the first quarter of 2015, where we saw density-optimized server shipment growth of 26.1% and revenue growth of 51.6%. This growth follows the previous quarter where density-optimized shipments and revenues were both in significant decline on a year-over-year basis. More traditional form factors typically have far more stable growth profiles."

HP captured worldwide market share of 24.9% on 10.6% year-over-year revenue growth to $3.2 billion. HP's revenue growth was driven primarily by strong demand for its rack-optimized servers. Meanwhile, the company's density-optimized business, while small overall, experienced triple-digit growth year-over-year.

Dell showed year-over-year growth of 12.6% and its $2.3 billion of revenue placed the company in the number 2 position with 18% market share this quarter. Dell also benefited from revenue growth in density-optimized and rack-optimized products. Dell's density-optimized revenue was the largest of any of the top 5 vendors.

IBM retained its number 3 position following its x86 divestiture with $1.7 billion in revenue and 13.2% market share. IBM's revenues are now associated with its POWER and mainframe product lines.

Lenovo and Cisco finished the quarter in a statistical tie* for the number 4 position. Lenovo captured 7.5% worldwide market share with $966 million in revenues. Cisco was close behind with $890 million in revenue and 6.9% revenue market share. Cisco's year-over-year growth of 44.4% was well above average for the industry, and suggests the company is not done capturing incremental market share in the server market. Cisco's blade business also continued to grow well, with Cisco producing more blade revenue than any other single company besides HP.

Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, Q1 2015

IDC's Worldwide Quarterly Server Tracker, May 2015

*Note: IDC declares a statistical tie in the worldwide server market when there is less than one percent difference in the revenue share of two or more vendors.