IBM, Dell and Oracle suffer server revenue crunch despite growing shipment volumes

The server industry has seen its revenues crunched during the third quarter of 2013 at the hands of cloud computing services, despite an increase in shipment volumes during the same period.

New figures from IDC shows a 3.7% year-on-year fall in revenues from server sales, to from $US12.6 billion during the third quarter of 2012 to $US 12.08 billion during the third quarter of 2013.

Market leader HP was able to hold off the trend, with a slight increase in revenues from $US3.33 billion during the third quarter of 2012 to $US 3.39 billion for the same quarter this year.

However, IT giant IBM was crunched, suffering a massive 19.4% drop in revenue from $US3.5 billion last year to just $US2.8 billion this year.

There were also falls at Dell ($US2 billion to $US1.9 billion) and Oracle ($US588 million to $494 million) and the broad “other” category ($US2.075 to $US2.035 billion).

The biggest winner in the sector was Cisco, currently the fourth largest company by revenue, which boosted its sales 42.8% from $US419 million to $US599 million.

IDC enterprise platforms general manager Matt Eastwood notes that low-end servers managed 3.5% revenue growth, while midrange and high-end server revenues fell by 17.8% and 22.5%, respectively.

“Worldwide server revenue declined in all major geographic regions including Americas, EMEA, and Asia/Pacific in the third quarter,” IDC enterprise platforms

“The market was impacted by a steady transition from 2nd Platform to 3rd Platform workload demand coupled with particularly weak sales of Unix servers, which served to further dampen the market.”

The IDC figures comes as a separate report, from Gartner, shows there was a slight year-on-year increase in server volume of 1.9% from the third quarter of 2012 to the same quarter this year.


The total number of servers shipped grew from 2.4 million during the third quarter of 2012 to 2.5 million for the same quarter this year.

The market leader by volume, HP, increased its shipment volume by 5.4% from 634,783 to 669,103, with its market share increasing from 25.8% to 26.7%.

However, second placed Dell saw its volumes fall 14.1% from 564,475 to 484,607, while IBM’s shipments collapsed by 28% from 280,424 to 201,777.

Chinese vendor Huawei saw a remarkable 202% increase in its volumes, albeit off a relatively low base, from 23,027 to 69,573.

Huawei’s rapid growth saw it overtake Fujitsu, which saw its shipments crumble from 76,128 to 68,424.

“The worldwide server market remains in a relatively weak performance mode as we move through the second half of the year,” Gartner research vice president Jeffrey Hewitt says.

“There were only three regions that exhibited positive vendor revenue growth. They were Canada at 6.5%, the Middle East and Africa at 12.1%, and the United States with 0.9% growth. In shipments, the Middle East and Africa had the greatest increase at 13% compared to the third quarter of 2012.”


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