UPDATED 04:28 EDT / AUGUST 28 2015

NEWS

Enterprise server market beats the odds to grow 6.1 percent

The enterprise server market has defied all the odds to grow by 6.1 percent in the second quarter of this year compared to the year before, according to International Data Corp. (IDC)’s latest Worldwide Quarterly Tracker for servers, ethernet switches and routers. Things are looking pretty rosy revenue-wise too, with total server sales of $13.48 billion making Q2 2015 the second-best quarter in the last five.

According to IDC, there was good news for server shipments as well, as they recorded a 3.2 percent rise to 2.29 million units for the quarter.

The analyst firm said the numbers show that enterprises are still keen to upgrade their data center infrastructures even as many transition from on-premise hardware and legacy software to cloud-based, open-source alternatives.

“The recent growth trend in the server market is confirmation of the larger IT investment taking place, despite dramatic change occurring in system software thanks to open source projects such as Docker and OpenStack,” said Al Gillen, program vice president for servers and system software at IDC. “While we do anticipate an impact on product mix and potentially on volumes, it is too early in the adoption cycle for these new software products to have a material impact on servers today. In the meantime, the market demonstrated healthy revenue and shipment growth this quarter.”

Breaking down the numbers by type, IDC said volume system revenue grew by 8.1 percent thanks to a demand for x86 servers in hyperscale environments, and the ongoing refresh cycle among small and medium-sized businesses (SMBs). But things weren’t quite so bright for midsize server systems, where revenues fell by 5.4 percent.

The high-end server market meanwhile, was helped out by IBM’s release of the z13 mainframe earlier this year, the analyst firm said. Kuba Stolarski, research manager for enterprise servers at IDC, said the z13 saw continued momentum in quarter two following a big jump in the first quarter.

“As some customers migrate their high-end workloads to new scale-up x86 platforms, opportunities for long-term non-x86 growth still exist with OpenPower and ARM, two of the most oft-mentioned potential alternatives to x86 architecture for hyperscale and cloud settings,” Stolarski said. “As customers look to the future, alternatives to contemporary IT solutions reside not just in chip architecture, but throughout the value chain: from software defined solutions, to disaggregation and composable systems, to network-deployed, edge-enabled IoT [Internet of things] compute, the server market landscape is changing dramatically.”

Hewlett-Packard Co. and Dell Inc. retained the top two spots in the server market, with revenues of $3.4 billion and and $2.3 billion respectively. HP’s overall market share grew to 25.4 percent, up from 25.1 percent in Q2 2014, while Dell’s market share slipped slightly to 17.5 percent, from 17.6 percent one year ago.

IDC tracker servers

Besides servers, IDC said that other markets saw decent growth too. Ethernet switches saw revenues rise by one percent to $5.8 billion, which admittedly isn’t a whole lot, yet defies the notion that the market is facing an imminent threat from software-defined networking (SDN).

Router sales were also up. According to IDC, the router market jumped by 11.5 percent compared to the same quarter last year.

“Contrary to the previous quarter, both the enterprise and service provider segments saw strong growth. The enterprise segment increased 8.3% year over year and 7.7% quarter over quarter in 2Q15.”

Main image credit: ChrisDag via flickr.com

A message from John Furrier, co-founder of SiliconANGLE:

Your vote of support is important to us and it helps us keep the content FREE.

One click below supports our mission to provide free, deep, and relevant content.  

Join our community on YouTube

Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.

“TheCUBE is an important partner to the industry. You guys really are a part of our events and we really appreciate you coming and I know people appreciate the content you create as well” – Andy Jassy

THANK YOU