Worldwide Server Market Revenue Declines 7.0% in the Third Quarter Amidst Softened Enterprise Demand, According to IDC

* Note: IDC declares a statistical tie in the worldwide server market when there is a difference of one percent or less in the vendor revenue shares among two or more vendors.

In addition to the table above, an interactive graphic showing worldwide market share (based on revenue) for the top 5 server vendors over the previous five quarters is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

"Other than Cisco, all major USA-based vendors experienced significant global revenue declines year over year, while many international and smaller suppliers were able to find areas of growth," said Lloyd Cohen, research director, Computing Platforms at IDC. "As large enterprise accounts slowed their demand for servers, small businesses and start-ups continued to grow their IT portfolios via non-traditional channels with innovative supply chain strategies. It will be interesting to see how this segment develops over time."

Top Server Market Findings
Regionally, Japan and Asia/Pacific (excluding Japan)(APeJ) experienced the only positive revenue growth with 3Q16 year-over-year increases of 1.0% and 0.3%, respectively. Within APeJ, China led the subdued market in growth with year-over-year revenue up 4.1% to $2.3 billion. All other regions declined. Latin America and the United States (USA) experienced relatively small declines at 6.1% and 7.9%, respectively. Of all regions, USA remains the largest regional market with 39.9% of server vendor revenue. EMEA declined 14.5%, with all sub-regions in decline (Central and Eastern Europe (CEE) declined 21.5%, Western Europe declined 13.7%, and Middle East and Africa (MEA) declined 13.5%). Canada declined by 24.5% year over year.

Demand for x86 servers weakened in 3Q16 with revenues decreasing 3.1% year over year in the quarter to $11.2 billion worldwide, while unit shipments decreased 4.3% to 2.36 million servers. x86 average selling prices (ASPs) increased by 1.3% year over year. HPE led the x86 server market with 27.2% revenue share based on a year-over-year decline of 12.9% in x86 revenue. Dell Technologies retained second place, securing 20.0% revenue share following an 8.7% year-over-year revenue decline.

Non-x86 servers experienced a revenue decline of 30.1% year over year to $1.3 billion, representing 10.8% of quarterly server revenue. IBM leads the segment with 64.3% revenue share despite a 32.9% year-over-year revenue decline. IDC also continued to track minimal revenue from ARM-based server sales in 3Q16; ARM sales have yet to make an impact on the server market.

IDC's Server Taxonomy
IDC's Server Taxonomy maps the eleven price bands within the server market into three price ranges: volume servers, midrange servers and high-end servers. The revenue data presented in this release is stated as vendor revenue for a server system. IDC presents data in vendor revenue to determine market share position. Vendor revenue represents those dollars recognized by multi-user system and server vendors for ISS (initial server shipment) and upgrade units sold through direct and indirect channels and includes the following embedded server components: Frame or cabinet and all cables, processors, memory, communications boards, operating system software, other bundled software and initial internal and external disk shipments.

IDC's Worldwide Quarterly Server Tracker is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly unit shipments and revenues (both vendor revenue and value of shipments), segmented by vendor, family, model, region, operating system, price band, CPU type, and architecture. For more information, please contact Lidice Fernandez at 305-351-3051 or lfernandez@idc.com.

About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of IDG, the world's leading technology media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.

All product and company names may be trademarks or registered trademarks of their respective holders.



Contact:

IDC
Kuba Stolarski, 508-935-4172
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or
Lloyd Cohen, 508-935-4333
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or
Jorge Vela, 508-935-4313
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Michael Shirer, 508-935-4200
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