Advanced Computing in the Age of AI | Tuesday, February 7, 2023

HPE Tops Dell in Q4 Server Market; High End Segment Up 8.9 Percent 

Looking back at the fourth quarter of 2019, when the big economic question was how long the boom begun in 2009 would continue, there was plenty of evidence that it wouldn't end any time soon, particularly in the tech industry.

In the worldwide server market, for the quarter ended Dec. 31, overall vendor revenues grew by 7.5 percent year-over-year, according to industry watcher International Data Corp., to $25.4 billion. Server shipments grew 14 percent YoY to more than 3.4 million units.

By category, high-end servers grew by 8.9 percent to $2.4 billion, while the midrange declined 14 percent to $3.3 billion and lower end volume servers revenue grew by 12.1 percent to nearly $20 billion.

"While the server market recaptured growth during the fourth quarter, it was a bit of a mixed bag as robust hyperscaler demand benefited the ODM (Original Design Manufacturer) Direct vendor group, which combined with strong non-x86 server purchases to drive the broader market," said Sebastian Lagana, research manager, Infrastructure Platforms and Technologies at IDC. "While the OEM x86 market was tepid, it's worth noting that 4Q18 was one of the most challenging comparison periods in history, during which many OEMs generated double-digit growth and large revenue bases."

IDC reported that HPE and its China-based H3C Group garnered a 16.3 percent revenue market share, displacing formerly first Dell Technologies at 15.7 percent. However, IDC called this a statistical tie, because there is a difference of less than 1 percent in the revenue shares of the two vendors. Having said that HPE/H3C Group revenues were down 3.4 percent YoY while Dell declined 9.9 percent. In terms of units, Dell, with 549,488, led the worldwide server market with 16.1 percent of servers shipped during the quarter, while HPE, with 507,228 units, shipped 14.9 percent.

Coming in third was IBM, generating 9.1 percent revenue share on growth of 17.6 percent, while Inspur/Inspur Power Systems was fourth with 6.8 percent revenue share and YoY growth of 12.1 percent. Lenovo and Huawei were statistically tied for fifth in the market with shares of 5.6 percent and 5.1 percent respectively. Lenovo's revenues declined 2.6 percent YoY while Huawei grew 1.8 percent in the fourth quarter.

The “ODM Direct group” of vendors, accounted for 25.5 percent of total revenue and was up nearly 38 percent from Q4 2018 to $6.47 billion.

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