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Beatriz Valle, IDC:
EMEA Server Market Grows by 0.6% in Q3 2011 to $3.2B
December 8, 2011
 The
EMEA server market displayed flat growth in 3Q11, with revenue of $3.2
billion, up 0.6% annually and 546,883 units shipped, 1.0% less than in
the same quarter last year. Revenue performance in the Western European
subregion was below the EMEA average, with server sales down 1.4%
annually. This was reflected in a shrinking Western European revenue
share of the overall EMEA server market, which generated 74.8% of total
sales, the smallest percentage since IDC records began. IDC believes
that the current fluctuations of the exchange rate as the euro
devaluates in the currency markets and more specifically against the
dollar had a significant effect on server system revenue in Western
Europe.
Growth was subdued in the biggest European economies, with France and
the U.K. growing by1.6% and 2.1%, respectively, and Germany recording a
slight decline in revenue, which was down 3.6% year on year. By
technology, x86 servers were the main market engine, with revenue
reaching $2.3 billion, up 3.5% year on year, and unit growth flat (down
0.7%). 98.3% of all servers shipped were x86 systems. Non-x86 server
revenue declined by 6.5% annually after sales fell short of the $1
billion mark at $875.5 million. Unit shipments fared worse, down 13.9%
annually with just above 9,000 servers shipped.
"The server market is displaying signs of deceleration as macroeconomic
conditions worsen worldwide. After a very strong second quarter that
exhibited the fastest rate of annual growth in seven years, the sluggish
pace of growth in the third quarter indicates that, although it is early
to assess the full impact the eurozone crisis will have in the Western
European server market, strict fiscal policies and a slackening of
private demand have already had a significant dampening effect on sales
of systems," said Beatriz Valle, senior research analyst in the
Enterprise Server Group for IDC EMEA.
"Looking at the demand side, IDC observes that virtualization will
continue its penetration of datacenters across sectors and countries in
Western Europe. Demand for virtualization in the SMB segment and
emerging markets is set to accelerate in the coming quarters. European
customers are also increasingly turning their attention to cloud
technologies, where IDC expects much stronger adoption patterns in the
coming quarters," said Nathaniel Martinez, research director in the
Enterprise Server Group for IDC EMEA.
Hyper-Scale Servers: Updating IDC's Tracker Segmentation
In response to market demands, vendors have developed new server designs
to address the unique needs of customers of large-scale, Web 2.0 hosting
and HPC environments. To reflect evolving market dynamics, IDC is
introducing a new form factor denominated "hyper-scale servers" in the
3Q11 edition of our EMEA Quarterly Server Tracker. Hyper-scale servers
are designed for large scale datacenter environments where parallelized
workloads are prevalent. The form factor serves the unique needs of
these datacenters with streamlined system designs that focus on
performance, energy efficiency, and density. These servers forego the
full management features and redundant hardware components found in
traditional enterprise servers. Instead, these capabilities are
accomplished primarily through software.
Hyper-scale servers generated $53.2 million in revenue for OEMs in 3Q11,
with units increasing by 20.9% YoY to reach 15,176 servers shipped.
Hyper-scale servers remain a relatively small segment of the market in
EMEA, where they represent around 1.7% of all server revenue and 2.8% of
shipments. The majority of the shipments in this category are still
typically linked to few large deals in HPC and cloud environments in
Western European countries, although some vendors are trying to make
this a run rate business by positioning hyper-scale products as a
go-to-platform for small hosters and departmental high-performance
clusters.
Blade
Despite hyper-scale servers eroding some demand in HPC and
virtualization driving strong consolidation in traditional enterprise
datacenters, blade servers outpaced the market in 3Q11, with mid-teen
year-on-year growth in revenue and 2.2% year-on-year increase in units.
"This was once again the result of sustained demand in emerging markets
in the Middle East and Eastern Europe, where x86 and non-x86 blades
posted double digit unit growth and 34% revenue growth year over year.
Western European demand was more subdued, with units slightly down year
on year and most of the revenue improvement (+6% year on year) driven by
a shift of non-x86 platforms onto blades, rather than organic growth in
x86 sales. Western European average selling value (ASV) in euros of x86
blades was flat QoQ, as vendors sacrificed some margins to keep volumes
going. Cisco continued gradually building out customer base and share,
accounting for around 7% of the x86 blade spending in EMEA in the
quarter," said Giorgio Nebuloni, senior research analyst in the
Enterprise Server Group for IDC EMEA.
Emerging Markets
Central and Eastern Europe, the Middle East, and Africa combined (CEMA)
continued in positive growth trend in 3Q11 despite slowing economic
conditions across the EMEA region. Server revenue totalled $813.24
million which represented 7.0% year-on-year growth. Large corporate
accounts as well as governmental entities were the major source of
server purchases across the CEMA region.
"Central and Eastern Europe (CEE) was the only region in EMEA to enjoy
growth. Strong server demand in countries such as Poland, Russia and the
Czech Republic contributed to an overall increase of 15.1% year on year,
reaching a total market value of $457.3 million. Traditionally slower
business activity in 3Q11 as well as political uncertainty in the Middle
East and North Africa impacted server sales in Middle East and Africa
(MEA) which declined by 1.8% year on year, after generating revenue of
$355.9 million. Israel and Turkey were among the countries with positive
growth, benefiting from demand from government and banking sectors,"
said Jiri Helebrand, senior research analyst, IDC CEMA.
Market Highlights
• x86 servers, up 3.5% annually, took 72.9% of the total revenue.
Non-x86 server revenue was down 6.5%, equivalent to 27.1% of total sales
in the EMEA server market for 3Q11.CISC revenue was down 7.9% year on
year, a significant decline especially after taking into account the
strong performance last year, mainly due to Western European refresh
activity on the back of strong road map releases. CISC revenue reached
$231.6 million in 3Q11. EPIC's decline accelerated, down 31.2% year on
year and now around 5.4% of total EMEA revenue. RISC performance
gathered momentum, up by 9.1% annually to $468.5 million, benefiting
from pent up demand.
• Windows continued as the leading operating system with 53.5% of
revenue ($1.7 billion), although the pace of annual growth has slowed to
3.7% as SMB spending slumped. Linux was the fastest growing of the main
operating systems, with demand positively impacted by strong x86 server
deployments, and revenue up 5.1% year on year. Unix was down 5.8% and
z/OS suffered a strong decline of 14.7% due to the cycle-driven slowdown
in mainframe sales.
• Blade systems enjoyed strong growth, with revenue up 14.6% annually.
This was the only form factor to grow in the double digits, since rack
systems grew by 4.0% and pedestal servers declined by 12.3% on the back
of a slackening in mainframe demand.
• Volume server revenue remained stable, with flat growth of 0.4%.
Midrange servers generated $468 million, growing 15.9% annually and
benefitting from the upsurge in RISC sales. The high end was negatively
impacted by the slowdown in the mainframe segment. As a consequence,
revenue was down 8.7% year on year to $558.8 million for the high-end
segment.
Vendor Highlights, Third Quarter of 2011
 •
HP continued to hold the top position in the EMEA server market for the
15th consecutive quarter, with ProLiant servers generating $1.1 billion,
equivalent to 48.2% of all x86 server sales in 3Q11.
• IBM enjoyed strong RISC results, with revenue of $263 million, and the
x86 server lines xSeries and System x generated a significant 49.3% of
the vendor's total sales for the quarter.
• Dell increased its market share by 1.8 percentage points in a quarter
of very subdued growth for its competitors, spearheaded by x86 market
demand, with sales of PowerEdge servers reaching $427 million.
• Like Dell, Oracle saw its share of the total market increase by a
significant 1.7 percentage points, with 3Q11 figures boosted by
simultaneity with the company's fiscal-year end, and overall revenue
driven by sales growth of the vendor's RISC servers, up 30.9% annually.
• Fujitsu maintained a stable market share in year-on-year comparisons,
with performance supported by solid sales of its x86 (Primergy) server
line, accounting for 67.4% of the vendor's revenue.
Top 5 Corporate Vendor Family, EMEA Server Factory Revenue, 3Q11
| Vendor |
3Q11 Revenue |
3Q11 Market Share
|
3Q10 Revenue |
3Q10 Market Share |
3Q11/3Q10 Growth |
| HP |
$1,307.3 |
40.5% |
$1,379.3 |
43.0% |
-5.2% |
| IBM |
$851.2 |
26.4% |
$890.6 |
27.8% |
-4.4% |
| Dell |
$427.0 |
13.2% |
$364.6 |
11.4% |
17.1% |
| Oracle |
$247.2 |
7.7% |
$192.7 |
6.0% |
28.3% |
| Fujitsu |
$174.0 |
5.4% |
$182.9 |
5.7% |
-4.9% |
| Other |
$219.0 |
6.8% |
$195.7 |
6.1% |
11.9% |
| Total |
$3,225.8 |
100.0% |
$3,205.8 |
100.0% |
0.6% |
Source: IDC's EMEA
Quarterly Server Tracker, December 2011 |
