In the fourth quarter of 2014, worldwide server shipments increased 4.8 percent year over year, while revenue grew 2.2 percent from the fourth quarter of 2013, according to Gartner, Inc.
In all of 2014, worldwide server shipments grew 2.2 percent, and server revenue increased 0.8 percent.
“There were several factors that produced the strong growth in the server market in 2014,” said Jeffrey Hewitt, research vice president at Gartner.
Hewitt added that, “On a worldwide basis, hyperscale data center deployments as well as service provider installations drove the x86-based server market upward. Enterprises had less unit growth impact because of the ongoing presence of physical server consolidation through x86-server virtualization. This overall market growth developed despite declines in both mainframe and Unix platforms.”
In the fourth quarter of 2014, the regions with the highest growth rates in terms of unit shipments were the Middle East and Africa (10.7 percent), Asia/Pacific (9.1 percent) and North America (7.6 percent).
HP led the worldwide server market based on revenue in the fourth quarter of 2014, but only grew 1.5 percent year over year. The company ended the year with $3.9 billion in revenue for a total share of 27.9 percent worldwide. IBM experienced a decline of 50.6 percent while Lenovo experienced strong growth of 743.4 percent. The significant changes in IBM’s and Lenovo’s growth rates are due to the completion of the sale of IBM’s x86 server business to Lenovo in the fourth quarter.
In Europe, the Middle East and Africa (EMEA), server shipments in the fourth quarter of 2014 declined 0.7 percent, while server revenue grew 1.2 percent, totaling $3.6 billion. In 2014, server shipments declined 2.5 percent and server revenue grew 2.1 percent.
“Despite considerable market pressures, the fourth-quarter server results in EMEA were unremarkable,” said Errol Rasit, research director at Gartner. “The region saw growth prospects related to installed-base refresh, big data projects and cloud computing expansion; however, political and economic instability, combined with U.S. dollar strength, dampened market demand in EMEA.”
In the fourth quarter of 2014, HP extended its revenue share lead in EMEA with 10 percent growth despite a 1.5 percent decline in server shipments. HP’s strong performance in the quarter came from strong demand for modular servers, replacement demand due to the latest ninth-generation platforms, and competitive growth.
For the second consecutive quarter, Dell held the second spot in EMEA as IBM’s divestment of x86 servers to Lenovo reduced IBM’s position to third. Dell recorded a 19 percent revenue growth. The growth was attributed to ongoing channel improvements, and strong sales execution. Dell also benefited from 13th-generation platform replacement activity.
Third-place IBM declined 57 percent as it suffered from a tough quarter compared with a year ago when System X revenue contributed to its total.
“Without including x86 revenue, IBM’s revenue would have declined by 14 percent in the fourth quarter of 2014,” said Mr. Rasit. “The weakness in IBM’s top-line result is also due to System Z investment slowing in anticipation of the newest-generation mainframe products. After recent weak results, Power Systems’ revenue grew marginally by 0.9 percent in the fourth quarter of 2014 in EMEA. Power Systems represents IBM’s growth strategy with key investments in PowerLinux and OpenPOWER.”
“Although revenue growth was in low single digits, and server shipments were constrained, 2014 was a year where the market in EMEA returned to consistent growth,” said Mr. Rasit. “We expect 2015 will exhibit a similar pattern of growth, however, the worsening currency effects related to a strong U.S. dollar is likely to drive price increases and restricted spending in EMEA.”
