Server Shipments Up, Revenue Down: IDC

You need a lot of servers to run a network heavy on the data-analysis apps.

Servers, the backbone of datacenters and thus the voluminous data-crunching of business-intelligence applications, aren’t exactly the brightest revenue spot for their respective manufacturers.

That’s according to new data from research firm IDC, which estimated that factory revenue in the worldwide server market decreased 2.4 percent year-over-year in the first quarter of 2012, to $11.8 billion. In the same quarter, however, server unit shipments increased 2.7 percent year-over-year, to 2 million units.

In a May 30 research note, IDC suggested that was the second-highest total ever reported in the first calendar quarter of any year. Volume systems experienced revenue growth, but demand for midrange and high-end systems experienced year-over-year declines.

“The server market worked through a transitional period in the first quarter of 2012 as suppliers prepared to introduce numerous critically important x86 server offerings,” Matt Eastwood, group vice president and general manager for Enterprise Platforms at IDC, wrote in a statement.

In other words, anticipated technology refreshes helped depress the overall numbers. Intel’s Xeon E5 dual-socket server processor is cited in the note as one of those refresh devices.

IDC estimated that the market for non-x86 servers declined 16.1 percent year-over-year, marking the third consecutive quarter of declines. Revenue related to Unix servers declined 17.2 percent year-over-year, to $2.2 billion.

“The Unix server refresh has largely ended as the Unix server market is in decline again, driven by workload consolidation and migration to competing platforms,” Kuba Stolarski, IDC’s research manager for enterprise servers, wrote in a statement. “Recent heightened awareness of the future of Itanium is also pressing down on customer demand for non-x86 servers and price competition is helping to drive down revenues in this segment.”

Oracle and Hewlett-Packard are about to go to trial over Itanium, a 64-bit chip architecture developed by a partnership of Intel and HP. Despite some early hype, analysts estimate that Itanium-based servers lagged their x86-based counterparts in total number of units sold. Oracle claims it stopped building software for Itanium after learning that Intel intended to end the architecture’s development; HP plans on arguing that Oracle ended its support as part of a larger plan to draw clients to its own SPARC/Solaris platform, violating a previous agreement with HP.

Nonetheless, HP still held the top position in terms of corporate family, worldwide server systems factory revenue in the first quarter of 2012, with a 29.3 percent share; Oracle was in fourth, with 6.1 percent. IBM came in second with 27.3 percent, followed by Dell with 15.6 percent. Fujitsu held the fifth spot with 5.2 percent of the overall market.

So while there might be a lot of churn in the server market on a company-by-company basis, the worldwide need for data services guarantees the demand for hardware for the foreseeable future.

 

Image: lucadp/Shutterstock.com

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