Global Server Shipments Declined 0.2% In 4Q12: Gartner

In the fourth quarter of 2012, worldwide server shipments declined 0.2 percent year-on-year, while revenue increased 5.1 percent from the fourth quarter of 2011, according to Gartner, Inc. For year-end results, worldwide server shipments grew 1.5 percent in 2012, and server revenue declined 0.6 percent.

“2012 was a year that definitely saw budgetary constraint which resulted in delays in x86-based server replacements in enterprise and mid-sized datacentres,” said Jeffrey Hewitt, Research Vice President at Gartner. “Application-as-a-business datacentres such as Baidu, Facebook and Google were the real drivers of significant volume growth for the year.”

“Relatively weak mainframe and RISC/Itanium Unix platform market performance kept overall revenue growth in check,” Hewitt said.

From a geographic perspective, the three highest growth rates were shown by North America (5.5 percent), Asia/Pacific (3.4 percent) and Latin America (0.2 percent) in terms of unit shipments. These were the only regions to experience an increase in shipments. These three regions grew at a rate of 16.3, 15.5 and 6 percent respectively.

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IBM extended its lead in the worldwide server market based on revenue in the fourth quarter of 2012. In the fourth quarter, IBM’s server revenue reached $5.1 billion in the fourth quarter of 2012 to increase its global market share to 34.9 percent. This was up from 33.7 percent market share in the fourth quarter in 2011.

Three of the top five global server vendors experienced revenue growth in the fourth quarter of 2012, with IBM showing the strongest growth rate of 8.9 percent, while Oracle had the steepest revenue decline of 18 percent.

In server shipments, HP remained the worldwide leader for the fourth quarter of 2012, as it accounted for 26.5 percent of the market. HP’s shipments declined 5.9 percent. The ProLiant brand remains as HP’s significant driver of server unit volume.

Of the top five vendors in server shipments worldwide, Cisco was the only vendor to experience an increase in shipments in the fourth quarter of 2012. Cisco’s worldwide server shipments increased 40.9 percent in the quarter.

The results for the quarter were centred around x86 server demand which increased in shipments by 0.2 percent and revenue by 6.6 percent for the fourth quarter of 2011.

Full Year 2012 Server Market Results

The year of 2012 demonstrated server revenue growth in spite of relative softness in some regions—most notably Western Europe. These results were fueled primarily by x86 servers which are the predominant platform used for large scale datacentre build outs, particularly in North America, while emerging regions such as Asia/Pacific and Latin America also added to the growth for the year.

Blade servers posted a revenue increase of 3.2 percent but a shipment decline of 3.8 percent for the year. HP was the 2012 leader with blades with 43.9 percent shipment share. IBM was in second place at 18.4 percent. Cisco grew to 12.5 percent shipment share for the year to end in third place.

The outlook for 2013 suggests that modest growth will continue. These increases continue to be buffered by the use of x86 server virtualisation to consolidate physical machines as they are replaced. Some replacements are likely to begin in the enterprise segment as servers continue to age and economies improve.