IT market research agency IDC has shared a report on the global server market for Q3 2016.
Revenue in the server market declined 7 percent year over year to $12.5 billion in the third quarter of 2016.
Server shipments decreased 4.6 percent to 2.38 million units.
ALSO READ: Gartner report on global server market for Q3 2016
IDC says server market growth slowed due to a slowdown in hyperscale datacenter growth and continued drag from declining high-end server sales.
Volume and midrange system revenue decreased 4.9 percent and 4.1 percent in 3Q16 to $10.3 billion and $1.1 billion, respectively. Demand for high-end systems experienced revenue decline of 25.0 percent to $1.1 billion. IDC expects continued long-term secular declines in high-end system revenue.
“The server market suffered a difficult quarter as previously healthy volume server growth faltered, suggesting that weakness in enterprise demand was more pronounced than expected,” said Kuba Stolarski, research director, Computing Platforms at IDC.
Hewlett Packard Enterprise (HPE) retained the number 1 spot in the server market with 25.9 percent market share in revenue, as revenue decreased 12.1 percent to $3.2 billion. HPE’s growth rate was impacted by the start of the H3C partnership in China that began in May of 2016.
Dell Technologies maintained its number 2 position in the server market with 17.8 percent of revenue, while revenue decreased 8.7 percent to $2.2 billion.
Lenovo, Cisco and IBM have 7.9 percent, 7.4 percent, and 6.9 percent revenue share, respectively.
Lenovo’s revenue declined 7.4 percent to $986 million, while Cisco grew its revenue 4.8 percent to $928 million. IBM’s revenue decreased 32.9 percent to $864 million.
Demand for x86 servers weakened in 3Q16 with revenues decreasing 3.1 percent in the quarter to $11.2 billion, while unit shipments decreased 4.3 percent to 2.36 million servers. x86 average selling prices (ASPs) increased 1.3 percent.
HPE led the x86 server market with 27.2 percent revenue share based on a year-over-year decline of 12.9 percent in x86 revenue. Dell Technologies retained second place, securing 20.0 percent revenue share following an 8.7 percent year-over-year revenue decline.
Non-x86 servers experienced a revenue decline of 30.1 percent to $1.3 billion, representing 10.8 percent of quarterly server revenue. IBM leads the segment with 64.3 percent revenue share despite a 32.9 percent revenue decline.
