The server market has had a difficult year so far in 2017, according to analyst firms Gartner Inc. and International Data Corp., both of which published global server market reports Wednesday showing a decline in revenues and shipments.

According to Gartner, worldwide server revenues hit $12.5 billion in the first quarter of 2017, a 4.5 percent drop from the same period a year ago. IDC had slightly different figures, but they weren’t much prettier, with server revenues down 4.6 percent, to $11.8 billion.

Curiously, though, the two research firms begged to differ on the state of server shipments in the first quarter. Gartner reported that shipments fell by 4.2 percent from a year ago, but IDC said they rose by 1.4 percent, to 2.21 million units.

Still, the two firms did agree on one fact: The growth of public cloud services is one of the main forces impacting server revenues.

“Although purchases in the hyperscale data center segment have been increasing, the enterprise and [small and medium-sized business] segments remain constrained as end users in these segments accommodate their increased application requirements through virtualization and consider cloud alternatives,” Jeffrey Hewitt, research vice president at Gartner, said in a statement.

Kuba Stolarski, research director for computing platforms at IDC, agreed. “As the market prepares for the switch to Intel’s Skylake this year, we may be witnessing a shift in how workloads are deployed in the future, and what architectural choices will be made around modularity, operating environments, software and cloud services,” he said. “As indicated by this quarter’s results, one large server customer appears to be betting on a major transition to cloud services, as it alone accounted for approximately a quarter of a million servers deployed in the first quarter.”

As far as individual server suppliers go, Hewlett Packard Enterprise Co. is now ranked as the largest seller in terms of revenue, commanding about a 24 percent share of the market according to both IDC and Gartner. However, both analysts said Dell EMC led the way in terms of server unit shipments.

Image: Judson Weinsheimer/Flickr