HPE vs Dell: who’ll address server needs of CIOs?

dell-technologies-and-hpeRecent Gartner report showed that Hewlett Packard Enterprises (HPE) and Dell Technologies continue to lead the server market, but the latter has more reasons to cheer.

Despite a decline of 6.4 percent, HPE continued to lead in the worldwide server market, based on revenue, with 23.7 percent market share.  The company’s market share dropped from 25.2 percent marked in the same period a year ago.

At the same time, Dell grew 9.9 percent and maintained the second spot in the market with 19.1 percent market share. Noticeably, Dell increased its market from 17.4 percent recorded in the last year.

Dell’s growth was driven primarily driven by x86 servers. It garnered 19.3 percent of the market and moved into the No. 1 position in worldwide server shipments due primarily to growth resulting from programs it has in place in the Asia/Pacific region, most notably in China.

HPE and Dell have adopted aggressive restructuring strategies in the recent past to meet rising demand from a cloud-centric business landscape.

The rivals have demonstrated opposite strategies in the race to conquer each other and rest of the players in the ground.

Earlier in the month, HPE announced plans for a spin-off and merger of its non-core software assets with Britain’s Micro Focus in a transaction valued at approximately $8.8 billion.

As the company continues its operational rejigs, HP expects the merger of its non-core software business as an important step in its strategy to unlock a faster growing, higher margin, stronger cash flow company.

“We are taking another important step in achieving the vision of creating a faster-growing, higher-margin, stronger cash-flow company well positioned for our customers and for the future,” HPE CEO Meg Whitman had said.

Dell on the other hand completed the acquisition of data storage giant EMC last week for an approximate $67 billion. The acquisition included EM subsidiaries VMware, Virtustream, RSA and Pivotal.

A report from the Synergy Research Group showed that Dell is chasing HPE, Cisco and Microsoft for leadership in the private cloud hardware, public cloud hardware and cloud infrastructure software markets.

Dell and EMC in aggregate would be ranked second in private cloud hardware and third in public cloud hardware based on Q2 2016 revenues.

According to Synergy, across all cloud hardware, HPE had the lead with 15 percent, closely followed by Cisco on 14 percent and Dell EMC 13 percent.

Dell Technologies’ majority owned VMware subsidiary was ranked second in cloud infrastructure software.

In the IDC worldwide server market report as well, Dell is just behind HPE with 18.3 percent market share in Q1 2016, slightly up from 18 percent in Q1 2015. HPE also raised its market share to 26.7 percent from 24.9 percent.

According to the research firm, worldwide server market revenue dropped in Q1, ending a seven quarter streak of year-over-year revenue growth.

IDC says server market demand slowed due to a pause in hyperscale server deployments as well as a clear end to the enterprise refresh cycle.

According to the firm’s Research Director Kuba Stolarski, the market focus is shifting towards software-defined infrastructure, hybrid environment management, and next-gen IT domains such as the Internet of Things (IoT), robotics, and cognitive analytics.

Dell reported revenue of $13.1 billion for the three months ending 29 July. In the third quarter, HPE reported $12.2 billion revenue, which was down 6.5 percent from previous year.

Both the companies have different strategies to attain the same goal in a competitive business climate. We must wait and watch how HPE will retain its top position while Dell chases it closely.

Arya MM
[email protected]

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