European server sales slump

IDC figures

Beancounters at IDC have added up some numbers and divided by their shoe size and reached the conclusion that European server sales have slid by 12.9 per cent.

IDC’s EMEA Server Tracker shows that in the fourth quarter of 2016 the EMEA server market reported an on-year decline in vendor revenues to $ 3.62 billion and an on-year decrease of 4.7 per cent. The numbers shipped fell to just under 600,000.

Revenues in the fourth quarter of 2016 declined 11.7 per cent on year.

The biggest decline was seen in custom rack optimized server units and revenues, which decreased 38.1 per cent and 39.9 per cent respectively. Standard rack optimised servers recorded the highest overall shipment numbers at 294,000 units, while large system servers saw the highest on-year shipment increase of 21.9 per cent to 1,706 units.

IDC’s Senior European Infrastructure research analyst Eckhardt Fischer said that the ODM market continues to show strength as it gains another percentage point share in Western Europe in the fourth quarter of 2016.

“This continued growth from the ODM market is indicative of the continued drive toward cloud, be it through well-established tier-1 providers, smaller service providers, or the hoster community in Western Europe,” he said.

HP has 33.9 per cent market share and remained at the top of the Western European server market, while second place Dell increased market share on year from 16.9 per cent to 17.8 per cent in the fourth quarter of 2016.

Revenues for IBM declined by 33.7 per cent, due in part to non-x86 refresh cycles and the continuing trend of declining non-x86 shipments.

Finland, Ireland, and the Netherlands were the worst performers in the fourth quarter, with on-year revenue declines between 25 per cent to 35 per cent as both pressure from ODMs and slowed purchasing cycles from major service providers continue to create a turbulent market environment.

With 20.5 per cent on-year revenue growth Italy outperformed its neighbours, while Switzerland saw an increase of 30.3 per cent in shipments due to some large investments in the high performance computing market, such as the expansion of the Swiss National Supercomputing Centre.

Central and Eastern Europe, the Middle East, and Africa server revenues declined by 16.8 per cent on year to EUR$ 730.63 million in the fourth quarter of 2016. This was because there were a limited number of infrastructure projects in the public space as well as the declining installed base of non-x86 servers were the major inhibitors in the last quarter of the year.

The Central and Eastern Europe sub-region declined by 25 per cent  on year with revenues of EUR$ 351.53 million due to the lack of demand in the public sector in Poland and Czech Republic, and a substantial reduction of non-x86 server sales in Russia. Pockets of demand were recorded among the service providers that continue to invest in off-premise infrastructure buildouts.