FRAMINGHAM, Mass. — (BUSINESS WIRE) — August 25, 2015 — According to the International Data Corporation ( IDC) Worldwide Quarterly Server Tracker, vendor revenue in the worldwide server market increased 6.1% year over year to $13.5 billion in the second quarter of 2015 (2Q15), the fifth consecutive quarter of year-over-year revenue growth. This quarter revenue grew in rack-optimized, blade, and density-optimized form factors, while towers declined slightly. Worldwide server shipments totaled 2.29 million units in 2Q15, an increase of 3.2% when compared with the second quarter of 2014.

On a year-over-year basis, volume system revenue increased 8.1% and high-end system demand increased 4.0% in 2Q15 to $10.1 billion and $2.3 billion, respectively. The volume segment was aided by a continued expansion of x86-based hyper-scale server infrastructures coupled with enterprise and SMB refresh of x86-based platforms, while high-end systems were helped by IBM's z13 refresh. Meanwhile, demand for midrange systems in 2Q15 contracted by -5.4% year over year to $1.1 billion, as the x86 refresh appears to have run its course in this segment.

"The recent growth trend in the server market is confirmation of the larger IT investment taking place, despite dramatic change occurring in system software thanks to open source projects such as Docker and OpenStack," said Al Gillen, Program Vice President, Servers and System Software, IDC. "While we do anticipate an impact on product mix and potentially on volumes, it is too early in the adoption cycle for these new software products to have a material impact on servers today. In the meantime, the market demonstrated healthy revenue and shipment growth this quarter."

Overall Server Market Standings, by Vendor

HP captured worldwide market share of 25.4% in 2Q15 on 7.7% year-over-year revenue growth to $3.4 billion. HP's revenue growth was driven primarily by strong demand for its density-optimized servers, which grew 118.7% year over year, and its rack-optimized servers, which grew at a more modest 10.5% year over year but still managed to contribute a larger portion to HP's overall revenue growth.

Dell showed year-over-year growth of 5.9% and its nearly $2.4 billion of revenue placed the company in the number 2 position with 17.5% market share this quarter. Dell benefited from revenue growth in its blade and rack-optimized products. Dell's blade server revenue grew faster than that of any of the top 5 vendors at 38.7%, discounting Lenovo's acquisition of IBM's x86 server business.

IBM retained its number 3 position following its x86 divestiture with $2.0 billion in revenue and 14.8% market share. IBM's revenues are now associated with its POWER and System Z product lines.

Lenovo and Cisco finished the quarter in a statistical tie* for the number 4 position. Lenovo captured 7.0% worldwide market share with $949 million in 2Q15 revenues. Cisco was close behind with $867 million in revenue and 6.4% revenue market share. Cisco's year-over-year growth of 19.3% was considerably above average for the industry and suggests the company is not done capturing incremental market share in the server market. Cisco's blade business also continued to grow well, with Cisco's blade revenue second only to HP in 2Q15.

Source: IDC's Worldwide Quarterly Server Tracker, August 2015

* Note: IDC declares a statistical tie in the worldwide server market when there is less than one percent difference in the revenue share of two or more vendors.

In addition to the table above, an interactive graphic showing total worldwide server revenues over the previous five quarters is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

"After a huge surge in revenue in the first quarter of 2015, IBM's z13 refresh predictably continued into the second quarter at a more modest pace," said Kuba Stolarski, Research Manager, Enterprise Servers at IDC. "As some customers migrate their high-end workloads to new scale-up x86 platforms, opportunities for long-term non-x86 growth still exist with OpenPower and ARM, two of the most oft-mentioned potential alternatives to x86 architecture for hyperscale and cloud settings. As customers look to the future, alternatives to contemporary IT solutions reside not just in chip architecture, but throughout the value chain: from software defined solutions, to disaggregation and composable systems, to network-deployed, edge-enabled IoT compute, the server market landscape is changing dramatically.

Top Server Market Findings

• While Asia/Pacific (excluding Japan)(APeJ) usually shows the greatest revenue growth year over year, for the second straight quarter it was outpaced by the U.S. market with a 12.6% increase, while APeJ followed closely at 12.0% year-over-year growth. Japan followed with a 6.4% revenue growth rate. Growth in Western Europe was relatively flat, declining -0.3%. The Middle East and Africa (MEA) showed modest revenue growth of 1.9% year over year. Canada, Central & Eastern Europe (CEE), and Latin America showed declines of -7.5%, -22.8% and -27.5%, respectively.
• Demand for x86 servers improved again in 2Q15 with revenues increasing 8.2% year over year to $10.8 billion worldwide as unit shipments increased 3.4% to 2.27 million servers. HP led the market with 29.9% revenue share based on 11.1% revenue growth over 2Q14. Dell retained second place, securing 21.9% revenue share following 5.9% year-over-year revenue growth.
• Non-x86 servers experienced a slight decline this quarter, down -1.4% year over year, after a very strong 1Q15. CISC mainframes, on the heels of IBM's z13 refresh last quarter, continued to prop up the non-x86 segment with 9.2% year on year growth.

IDC's Server Taxonomy
IDC's Server Taxonomy maps the eleven price bands within the server market into three price ranges: volume servers, midrange servers and high-end servers. The revenue data presented in this release is stated as vendor revenue for a server system. IDC presents data in vendor revenue to determine market share position. Vendor revenue represents those dollars recognized by multi-user system and server vendors for ISS and upgrade units sold through direct and indirect channels and includes the following embedded server components: frame or cabinet and all cables, processors, memory, communications boards, operating system software, other bundled software and initial internal and external disk shipments.

IDC's Worldwide Quarterly Server Tracker is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly shipments (both initial server shipments and upgrades) and revenues (both value and vendor revenue), segmented by vendor, product family, model, region, operating system, price band, CPU type, and architecture. For more information, please contact Lidice Fernandez at 305-351-3051 or lfernandez@idc.com.

About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.

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