The cloud apparently isn't slowing demand for servers as some had once feared; rather, it's one of the key drivers for record high revenue in the global server industry.
Analyst firm International Data Corporation (IDC) reported on Sept. 5 that in the second quarter of 2018, worldwide server revenues hit $22.5 billion, for a 43.7 percent year-over-year gain. Shipments also grew, albeit at a someone slower rate of 20.5 percent, for a total of 2.9 million server units shipped.
"The worldwide server market continues to flourish amid a market-wide enterprise refresh cycle and increasing demand from cloud service providers," Sanjay Medvitz, senior research analyst, Servers and Storage at IDC, wrote in a statement.
Cloud service providers aren't the only ones fueling continued demand for servers. Medvitz noted enterprises are also investing in new server infrastructure to achieve cloud-like benefits on-premises. Additionally, Medvitz commented that high average selling prices for high-end servers also helped to grow server revenues during the quarter.
Server revenue growth was highest in Asia/Pacific at 55.0 percent revenue growth, while in the U.S. server revenue grew by 48.1 percent.
Demand was also strong from x86 and non-X86 servers during the quarter. IDC reported x86 server revenue for the 2Q18 at $20.5 billion, for a 44.1 percent year-over-year gain. Revenues for non-x86 servers were reported at $2.1 billion, for a 39.8 percent gain over the second quarter of 2017.
The big winner during the quarter was Dell EMC, which was identified by IDC as the top server vendor in the world for the first time. IDC reported Dell had 18.8 percent share of global server revenues and grew by 52.9 percent year-over-year.
HPE/New H3C Group was ranked second with 16.6 percent revenue share.Third place was a statistical tie between IBM and Lenovo.
Sean Michael Kerner is a senior editor at ServerWatch and InternetNews.com. Follow him on Twitter @TechJournalist.