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Finding the server business tepid? Join the club.

Industry watchers Gartner and IDC both issued recent reports on Q1 server sales. Although the two companies disagreed on some details, they agreed that overall server shipments are weak.

According to Gartner, worldwide server sales in the first quarter of this year fell 4.2 percent from the year-earlier period. More specifically Gartner believes worldwide server sales in Q1:17 totaled $12.5 billion, compared with $13.1 billion in the year-earlier quarter.

IDC’s estimate is pretty close. It reckons worldwide server sales in Q1 fell 4.6 percent from the year before. But its dollar estimate for Q1 server sales worldwide is $11.8 billion, or $700 million lower than Gartner’s figure.



Unit shipments also fell. Gartner estimates that 2.6 million servers were shipped worldwide in this year’s first quarter, compared with 2.7 million in the year-earlier quarter. That’s a decline of 4.2 percent.

Gartner and IDC also agree on the ranking of the top vendors. By revenue, the worldwide leader in Q1:17 was HPE, with a 24 percent market share. It was followed in order by Dell EMC, Cisco, IBM and Lenovo.

Weakening forces

So what’s making the server market weak?

According to Gartner, both the enterprise and SMB markets “remain constrained” due to users moving to virtualization and the cloud. No surprise there.

IDC, meanwhile, says most hyperscale service providers are waiting until the second half of this year for deployment of Intel’s new 7th gen Skylake processors for servers. IDC also believes the server market has been hurt by the DRAM shortage, which is driving up memory prices.

Intel’s server growth

Speaking of Intel, the company’s 2016-2017 IT Annual Performance Report, issued last week, shows the company bucking the general trend and increasing its own use of servers dramatically. Intel’s 58 data centers worldwide now operate some 185,000 servers, more than double the roughly 84,000 servers they ran in 2014.

Intel’s report also says the company is deploying software-defined infrastructure and cloud-based technologies, as well as increasing data-center density.

Two years ago, Intel retrofitted an unused fab factory space, creating 2 ultra-high-efficiency data centers. These facilities now have the industry’s highest compute density, Intel says: 280 Xeon processor-based nodes in each 60-unit rack. They also have an excellent power-usage effectiveness (PUE) ratio of 1.06.

How about you? Are you feeling the server crunch? Or finding growth by helping data-center customers get more productive?

Blog Category: 
Cloud and Data Centers