Global Server Revenue Grew 7.9% In 2011: Gartner

The worldwide server market ended 2011 with mixed results, as worldwide server revenue declined 5.4 percent in the fourth quarter of 2011 and server shipments increased 4.5 percent, according to Gartner, Inc. For the year, worldwide server revenue grew 7.9 percent (see Table 3), and server shipments increased 7 percent (see Table 4).

“The shortage of hard-disk drive (HDD) inventory because of the Thailand floods in October 2011 provided supply issues, and many providers could not meet the demand in the last weeks of 2011, said Jeffrey Hewitt, research vice president at Gartner. “We expect the negative impact of these drive supply issues to continue into 1Q12.”

From a geographic perspective, all regions grew year-on-year in shipments for the quarter, with the exception of Western Europe which fell 3.1 percent for the period. In vendor revenue for the fourth quarter of 2011, Asia/Pacific, Eastern Europe, Japan and Middle East/Africa all posted mid-high-single-digit to low-double-digit year-on-year growth, while Canada, Latin America, USA and Western Europe all posted high-single-digit to low-double-digit declines.

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IBM was the market leader in the worldwide server market based on revenue (see Table 1)–the company ended the year with $4.7 billion in revenue for the fourth quarter of 2011 for a total share of 33.7 percent. IBM’s revenue was down 10.2 compared to the same quarter in 2010. IBM’s growth was fueled by its Power Systems product line.

Of the top five global vendors, Dell was the only vendor to experience a growth in worldwide server revenue with 7.3 percent growth in the fourth quarter of 2011.

In server shipments, HP remained the worldwide leader for the fourth quarter of 2011 (see Table 2). HP accounted for 28.1 percent of global shipments in the fourth quarter of 2011, despite a shipment decline of 8.1 percent.

Of the top 5 vendors in server shipments worldwide, Lenovo and Dell were the only vendors to post shipment increases. Lenovo’s shipments grew 51 percent, and Dell increased 11.2 percent compare to the fourth quarter of 2010.

The results for the quarter were centered around x86 server demand which increased in shipments by 5 percent and revenue by 2.6 percent for the fourth quarter of 2011.

Full Year 2011 Server Market Results

In 2011, the server market was fueled primarily by x86 servers which are the predominant platform used for large scale data center build outs, particularly in North America while emerging regions like Asia Pacific and Latin America also added to the growth for the year.

“2011 was a year that saw worldwide server growth driven by mega data centers and the explosion of client devices such as smartphones and tablets accessing Web content,” Hewitt said. “We have definitely seen a more pronounced segmentation between hyper-scale data centers and the traditional enterprise and mid-sized customer.”

“Ongoing blade server and ‘skinless’ server growth in the x86 segment also helped push 2011 results in spite of ongoing constraints in other segments such as RISC/Itanium Unix platforms.” Hewitt said.
Blade servers posted a revenue increase of 14.5 percent and a shipment increase of 4.2 percent for the year. HP was the 2011 leader in blade servers accounting for 44 percent of shipments, with IBM being in second place at 21 percent. Cisco grew to an 8 percent shipment share in the form factor to end the year in fourth place, just behind Dell who had 9.3 percent.

“The outlook for 2012 suggests that growth will continue. These increases continue to be buffered by the use of x86 server virtualisation to consolidate physical machines as they are replaced, but the introduction of new processors from Intel and AMD is likely to help fuel and initiate a new round of server replacement cycles,” Hewitt said.