HPE Leads Contracting Server Market As Cloud Popularity Grows

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined
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Revenues fall but shipments rise, says Gartner, as SMBs look to the cloud to satisfy growing needs

HPE continues to dominate the worldwide server market ahead of Dell, IBM and Lenovo, but sector revenues fell by 2.3 percent despite an increase in shipments of 1.7 percent, according to figures from Gartner.

Analysts said certain regions are opting for cheaper equipment and small businesses are spending more on cloud applications than making significant server purchases.

“Although revenue declined, the first quarter of 2016 continued with a trend of low-level shipments growth on a global level with a variation in results by region,” said Jeffrey Hewitt, research vice president at Gartner.

Server market

290_CloudlineServer“The drop in revenues in light of shipment increases demonstrates that the servers that shipped during the period had lower average selling prices than those that shipped in the same time frame last year.

“The real driver of global growth continues to be the hyperscale data center segment. The enterprise and small or midsize business (SMB) segments remain relatively flat as end users in these segments accommodated their increased application requirements through virtualization and considered cloud alternatives.”

Total sector revenues reached £13 billion during the first quarter of 2016, of which HPE secured $3.3 billion – a quarter of the whole market and an increase of 3.3 percent.

Second placed Dell’s revenues fell by 1.4 percent to £2.3 billion, a 17.3 percent share while IBM’s income eroded by a third to £1.27 billion – 9.7 percent of the market. Lenovo and Cisco also experienced falls in revenue to round up the top 5.

HPE also led in shipments with 526,115 units (19.4 percent of the market), head of Dell and Lenovo which both saw drops. Huawei’s share of the market is now 4 percent as shipments jumped by 23.6 percent to 109,390 and Inspur enjoyed a 19.1 percent rise to 109,390. Other vendors accounted for 47.4 percent of the market as volumes rose by 6.3 percent to 1.3 million. In total, 2.7 million servers were shipped during the period.