Worldwide Server Market Accelerates Sharply in Fourth Quarter as Demand for Heterogeneous Platforms Leads the Way, According to IDC
FRAMINGHAM, MA – February 28, 2011 – According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market increased 15.3% year over year to $15.0 billion in the fourth quarter of 2010 (4Q10). This was the highest quarterly revenue in three years and the fourth consecutive quarter with improving year-over-year revenue growth as the market continued to accelerate throughout the calendar year. Worldwide server shipments increased 6.1% to 2.1 million units in 4Q10 when compared with the year-ago period. For the full year 2010, worldwide server revenue increased 11.4% to $48.1 billion when compared to 2009, while worldwide unit shipments increased 15.3% to 7.6 million units.
On a year-over-year basis, volume systems continued to experience a nice rebound with 13.4% revenue growth in 4Q10. Demand for midrange servers (servers priced $25,000 to $250,000) experienced a year-over-year factory revenue decline of 2.1%, while high-end revenue grew 29.1% when compared to 4Q09. This is the highest quarterly growth rate IDC has ever reported for the high-end as product refresh earlier in 2010 stimulated market demand significantly.
"Non-x86 platforms contributed significantly to the server market recovery in the fourth quarter and it remains clear that a variety of heterogeneous server platforms remain an integral part of a comprehensive enterprise IT strategy today," said Matt Eastwood, group vice president of IDC's Enterprise Platforms Group. "At the same time, datacenters are being optimized to support virtualization, automation, convergence, workload-optimized systems, and cloud strategies in both large and small organizations around the globe. For end-users, there are more IT choices available than ever, many of which are designed to deliver impressive price-performance gains to the datacenter and virtually all of these IT infrastructure solutions leverage server platforms at their core."
Overall Server Market Standings, by Vendor
IBM held onto the number 1 spot in the worldwide server systems market with 37.4% market share in factory revenue for 4Q10, as revenue increased 21.9% year over year. IBM experienced strong improvement in demand for its System z mainframe systems and continued demand for x86-based System x servers in the quarter. HP held the number 2 spot with 29.9% share for the quarter as revenue increased 13.2% compared to 4Q09. HP was helped by continued demand for its x86-based ProLiant servers. Dell maintained third place with 12.6% factory revenue market share in 4Q10. Dell experienced 26.8% revenue growth compared with 4Q09 due to strength in demand from SMB, enterprise, and public sector customers. Number 4 vendor Oracle experienced a year-over-year revenue decline of 14.4% in 4Q10 to 5.9% market share while Fujitsu, experienced a 9.4% decrease in factory revenue holding 3.6% revenue share in 4Q10.
"The marked increase in System z revenue that was seen in the fourth quarter reflects the deep investment that IBM made in reinventing its long-lived datacenter platform by closely linking it to a distributed-system blade chassis running POWER and x86 systems for workloads with mainframe affinity," said Jean S. Bozman, research vice president, IDC's Enterprise Platforms Group. "Pent-up demand within the installed base, following high-end server declines in 2009 and 2010,was a key driver in the mainframe revenue increase, showing both the need for increased capacity, and an mainframe customer support of this approach to hybrid-systems computing."
Top Server Market Findings
— IBM's System z servers running z/OS experienced the second consecutive
quarter of positive revenue growth, with 69.1% year-over-year growth in
4Q10 to $1.7 billion. This is the fastest quarterly revenue growth IDC
has ever reported for IBM mainframes, as systems running the z/OS
operating platform accounted for 11.3% of all server revenue in 4Q10 and
IBM System z was the only platform outside of Linux and Windows to
experience positive revenue growth in the quarter.
— Linux server demand also improved in 4Q10 with revenue growing 29.3% to
$2.5 billion when compared with the fourth quarter of 2009. Linux
servers now represent 17.0% of all server revenue, up 1.8 points over
4Q09. Shipments of servers running Linux increased 9.8% year over year,
totaling more than 450,000 units.
— Microsoft Windows server demand was positively impacted by the x86
server market refresh as hardware revenue increased 16.8% year over
year. Quarterly revenue of $6.3 billion for Windows servers represented
42.1% of overall quarterly factory revenue. The 1.5 million server
shipments are the highest quarterly total ever reported for Windows
— UNIX server revenue was relatively flat with a 0.4% decrease when
compared to 4Q09, as the demand for the platform stabilized in the
quarter. Worldwide Unix revenues were $3.8 billion for the quarter,
representing 25.6% of quarterly server spending.
x86 Industry Standard Server Market Dynamics
The x86 server market continued to grow sharply in 4Q10, growing 21.4% in the quarter to $9.0 billion worldwide as unit shipments increased 6.7% to 2.0 million servers. This is the highest quarterly revenue ever reported for x86 servers as the architecture accounted for 59.7% of all server spending. Each of the top 5 server vendors experienced positive x86 server revenue growth in the quarter. HP led the market with 38.5% revenue share. Dell experienced the sharpest growth and retained second place with 21.1% revenue share — a 0.9 point year-over-year share gain. IBM held the number 3 position with 19.0% revenue share while Fujitsu and Sun captured 3.5% and 2.8% share respectively. Due to strong demand throughout the year, worldwide x86 server revenue for 2010 increased 28.7% to $30.6 billion, while worldwide x86 unit shipments increased 16.6% to 7.4 million units.
"Within the x86 market, high-end servers showed higher growth rates for both server shipments and revenue than low-end servers," said Reuben Miller, senior analyst in IDC's Worldwide Enterprise Server group. "With the introduction of higher performing processors with multiple cores, customers are finding more benefit in purchasing multi-socket server units than single socket systems. As the demand for performance continues to increase with limited space available, systems that can hold more multi-core processors in a given space are becoming more valuable to customers."
Bladed Server Market Shows Strong Shipment and Revenue Growth
The blade market continued to grow in the quarter reaching a new revenue high despite facing the most difficult yearly compares of any segment as blade market revenue growth in Q409 was more than four times the growth of the other form factors. Factory revenue in 4Q10 increased 12.6% year over year on 0.4% shipment growth. Overall, bladed servers — including x86, EPIC, and RISC blades — accounted for $2.0 billion in the fourth quarter representing 13.4% of quarterly server market revenue. More than 85% of all blade revenue is driven by x86 systems where blades now represent 19.2% of all x86 server revenue. HP maintained the number 1 spot in the server blade market in 4Q10 with 53.4% revenue share and IBM finished with 28.1% revenue share. For the full year 2010, worldwide blade server revenue grew 24.7% year over year to $6.6 billion.
"Customers continue to invest in blade platforms and the fourth quarter generated the highest quarterly revenue for the blade segment since their introduction to the market eight years ago," said Jed Scaramella, research manager of IDC's Enterprise Platforms and Datacenter Trends group. "Blades, which have always been a strong consolidation platform, are running higher levels of virtualization and automation that increases the flexibility of the IT infrastructure. As a basis for converged systems, blades are increasing the responsiveness of the IT organization."
Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, Fourth Quarter of 2010
(Revenues are in Millions)
Q4 2010 Market Q4 2009 Market Growth
Vendor Revenue Share Revenue Share Q410/Q409