Server shipments and revenue are down

Global server revenue dropped 4.5 percent in the first quarter of 2017, according to the latest updates from Gartner. Shipments were also down 4.2 percent compared to the first quarter of last year.

Looking at the global server market, Hewlett Packard Enterprise (HPE) is still leading the charge, based on revenue. It posted more than $3 billion in revenue, with a total share of 24.1 percent for Q1 2017. Dell EMC held on to second place with a 19 percent market share, as the only vendor to experience growth this year.

In terms of server shipments, Dell EMC has a 17.9 per cent market share and is thus the market leader. It has had a 0.5 percent growth over the first quarter of 2016, as well. HPE is in second place, with a 16.7 percent decline.

Server revenue in the EMEA region amounted to $2.8 billion in Q1 2017, which is a 12.2 percent decline compared to the same period last year. A total of 503,000 server units were shipped in this period, down eight percent year on year.

Revenues declined for everyone except Dell EMC. Rankings improved for Cisco, Fujitsu and Lenovo. IBM fell out of the top five.

Gartner says "political and economic uncertainty" is what makes businesses buy less servers. A shift towards hyperscale architectures means service providers are buying more of the lower-cost "white-box" servers from ODMs.

"Leading server vendors will be doing all they can to ensure that service providers don’t continue to shift their server purchases toward ODM suppliers," says Adrian O'Connell, research director at Gartner. "Combined with the significant inroads made by China-based suppliers, we expect to see continuing challenges and downward price pressure across the EMEA server market for some time to come."

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