Gartner Says Worldwide Server Revenue Declined 2.3 Percent in the First Quarter of 2016, While Shipments Increased 1.7 Percent

In the first quarter of 2016, worldwide server revenue declined 2.3 percent year over year, while shipments grew 1.7 percent from the first quarter of 2015, according to Gartner, Inc.

"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. "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."

All regions showed a decline in either shipments and/or vendor revenue except for Asia/Pacific, which posted 9.7 percent growth in revenue and 8.4 percent growth in shipments for the period. Western Europe grew 1.4 percent in shipments and 1.5 percent in revenue. North America posted a 1 percent increase in shipments but declined 5.9 percent year over year in revenue.

"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," Mr. Hewitt said.

Hewlett Packard Enterprise (HPE) continued to lead in the worldwide server market, based on revenue, with a 25.2 percent market share (see Table 1). HPE was the only vendor in the top five to experience growth in the first quarter of 2016. Despite a decline of 1.4 percent, Dell maintained the second spot in the market with 17.3 percent market share. IBM secured the third position with 9.7 percent of the market, but experienced the largest decline among the top five vendors.

Table 1
Company 1Q16 Revenue 1Q16 Market Share (%) 1Q15 Revenue 1Q15 Market Share (%) 1Q16-1Q15 Growth (%)HPE 3,296,591,967 25.2 3,191,694,948 23.8 3.3Dell 2,265,272,258 17.3 2,296,473,026 17.1 -1.4IBM 1,270,901,371 9.7 1,887,939,141 14.1 -32.7Lenovo 871,335,542 6.7 970,254,659 7.2 -10.2Cisco 850,230,000 6.5 890,179,930 6.6 -4.5Others 4,537,261,457 34.7 4,157,871,705 31.0 9.1Total 13,091,592,596 100.0 13,394,413,410 100.0 -2.3

In server shipments, HPE remained the worldwide leader in the first quarter of 2016, even with a year-over-year shipment decline of 1.6 percent (see Table 2). HPE's worldwide server shipment share was 19.4 percent, representing a 0.6 percent drop in share from the first quarter of 2015.

Of the top five vendors in server shipments worldwide, only Huawei and Inspur produced shipment increases.

Table 2
Company 1Q16 Shipments 1Q16 Market Share (%) 1Q15 Shipments 1Q15 Market Share (%) 1Q16-1Q15 Growth (%)HPE 526,115 19.4 534,559 20.0 -1.6Dell 464,292 17.1 507,433 19.0 -8.5Lenovo 199,189 7.3 220,379 8.3 -9.6Huawei 130,755 4.8 105,803 4.0 23.6Inspur 109,390 4.0 91,847 3.4 19.1Others 1,286,097 47.4 1,209,319 45.3 6.3Total 2,715,838 100.0 2,669,340 100.0 1.7

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