Server market revenue fell 0.4 percent to $13.4 billion, while server shipments rose 2.6 percent to 2.4 million units in the second quarter of 2016, said IDC.
A pause in hyper-scale datacenter expansion and high-end server sale declines are the main reasons for drop in server market revenue.
Volume system revenue rose 5.3 percent to $10.6 billion, while midrange system demand grew 12.7 percent to $1.3 billion. Midrange systems were helped by enterprise investment in scalable systems for virtualization and consolidation, as well as increases in x86-based mission critical systems.
High-end systems posted revenue decline of 31.4 percent to $1.6 billion.
“As we prepare for the second half of 2016, expect to see market growth led by cloud datacenter build outs from key hyper-scalers. The market will be impacted by digital transformation initiatives, including the Internet of Things and cognitive computing, and by a continuing shift towards software-defined infrastructure,” said Kuba Stolarski, research director, Computing Platforms at IDC.
Server vendors and market share
Hewlett Packard Enterprise (HPE) retained the number 1 spot in the server market with 25.4 percent market share in vendor revenue. HPE’s server revenue fell 0.3 percent to $3.4 billion. HPE’s growth rate was impacted by the start of the H3C partnership in China that began in May of 2016.
Dell, which maintained its number 2 position in the server market, achieved server revenue growth of 10.0 percent to $2.6 billion, resulting in 19.3 percent vendor revenue market share.
IBM, which retained # 3 position with 9.8 percent share, posted 34 percent drop in revenue to $1.3 billion. IBM’s POWER systems and system z mainframes experienced double-digit declines.
Lenovo has 7.2 percent, while Cisco has 6.4 percent market share in server market. Lenovo earned $969 million in server revenues following an increase of 2.1 percent, while Cisco’s revenues declined 0.7 percent to $860 million, said IDC.