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Cisco jumps in server sales

Cisco was the big winner, IBM the loser in the latest server sales studies by IDC and Gartners.

Cisco was the big winner, IBM the loser in the latest server sales studies by IDC and Gartners.

IDC said factory revenue in the worldwide server market decreased 2.2% year over year to $10.9bn in the first quarter of 2014. Server unit shipments improved 2.1 % to 2.1 million units as investments in datacentre capacity were largely offset by consolidation, which continued to be a strategic focus for many large and small customers around the globe.

The midrange and high-end markets were impacted by difficult year-over-year comparisons combined with transitions in the technology refresh cycles typical for these segments, said IDC

“The server market continues to be heavily influenced by the emergence of the 3rd Platform as mobile, cloud, big data, and social enablement drive significant hyperscale server deployments globally,” said Matt Eastwood, group vice president and general manager, Enterprise Platforms at IDC.

HP held the number 1 position in the worldwide server market with 26.5% factory revenue share for 1Q14. HP's -2.0% revenue decline came mainly from continued weakness in Itanium-based server revenue. IBM held the number 2 spot with 19.1% share for the quarter as factory revenue decreased -25.4% compared to 1Q13. Cisco's 1Q14 factory revenue increased 37.0% compared to 1Q13, gaining 1.6 points of market share, and Oracle's factory revenue was up 1.9% year over year in 1Q14.

Gartner also named Cisco as the only company in the top five that increased revenue in the first quarter of 2014, with growth of 37% compared with the same quarter in 2013.

In EMEA, while server shipments continued to decline in the first quarter of 2014, revenues grew for the first time after 10 consecutive quarters of year-over-year declines, says Gartner. Server shipments totaled 547,900 units, a decrease of 6.1% from the first quarter of 2013. Server revenue totaled $3.0bn, an increase of 2.5% in the first quarter of 2014.

“Although shipments contracted, the fact that the server market has finally shown revenue growth will be a welcome relief for server vendors,” said Adrian O’Connell, research director at Gartner. “The business environment in EMEA remains challenging, but the severe declines that we’ve witnessed in the non-x86 product segments have abated, at least in the first quarter of 2014.”

From a regional perspective, Eastern Europe experienced the largest revenue decline of 14.5 percent in the first quarter of 2014. Server revenues in the Middle East and Africa region declined 3.6 percent, but Western Europe achieved an increase of 6.7 percent in revenue.

Demand for x86 servers grew in Q1 with revenues increasing 4.9% year over year in the quarter to $8.9bn worldwide as unit shipments increased 2.5% to 2.1 million servers, says IDC. HP led the market with 29.6% revenue share based on 0.4% revenue growth yr/yr. Dell retained second place, securing 22.0% revenue share.

Density Optimized servers, used by large heterogeneous datacentres, fell back as demand in 1Q14. Revenue declined -10.8% year over year in Q1 to $649m as unit shipments decreased -6.0% to 215,567 servers. Density Optimised servers now represent 6.0% of all server revenue and 10.4% of all server shipments.

Blade servers increased 2.3% year over year to $2.0bn. Blades now account for 18.0% of total server revenue. HP maintained the number 1 spot in the blade server market in 1Q13 with 43.7% revenue share; Cisco held the second position in the blade market with 24.4% revenue share; and IBM held the third position with 12.3% revenue share.