The global market for computer servers is expanding thanks to demand from large cloud service providers as well as a growing appetite for systems that can power modern workloads such as artificial intelligence and big data analytics.

In its latest Worldwide Quarterly Server Tracker for Q1 2017, market researcher International Data Corp. said server makers posted record revenue gains. Total revenue for the first quarter came in at $18.8 billion, up 39 percent from one year ago. Shipments also grew by 21 percent, to 2.7 million units.

Dell Technologies was the standout performer during the quarter, but original design manufacturers, the so-called “white box” manufacturers, reaped the biggest benefits of the quarter’s server slurp. ODMs are the biggest beneficiaries of hyperscale data center operators such as Alibaba Group Ltd., Amazon Web Services Inc., Facebook Inc., Google Inc. and Microsoft Corp., which continue to build out massive facilities around the world.

These hyperscalers have insatiable demands for data center infrastructure, with factors such as cost, density and power efficiency being just as important as performance. Such companies also have the cash and know-how to develop systems by themselves, which helps to make equipment sold by lower-cost ODMs a more appealing option than the expensive, proprietary systems sold by firms such as Dell.

Besides the hyperscalers, demand for servers was also driven by enterprises’ need for systems capable of running software-defined infrastructure and next-generation workloads including AI, data analytics and machine learning. The average price for server gear also rose during the quarter, helping boost manufacturers’ bottom lines, IDC said.

Dell came out on top of the pile in terms of market share at 19.1 percent, just ahead of Hewlett-Packard Enterprise Co., which took home 18.6 percent. Dell recorded far superior revenue growth, however, at 50.6 percent to HPE’s 22.6 percent. China’s Lenovo Group Ltd. was the third-largest supplier with a 5.8 percent share of the market, closely followed by IBM Corp. with 5.3 percent and Cisco Systems Inc. with 5.2 percent.

However, it was the ODMs that saw the largest growth, with their collective revenues rising by 57 percent in the quarter.

“Hyperscale growth continued to drive server volume demand in the first quarter,” Sanjay Medvitz, senior research analyst for servers and storage at IDC, said in a statement. “While various OEMs are finding success in this space, ODMs remain the primary beneficiary from the quickly growing hyperscale server demand, now accounting for roughly a quarter of overall server market revenue and shipments.”

Images: IDC