Server Market Continues to Decline in 2013

by Sean Michael Kerner

Both IDC and Gartner report shipment and revenue declines, though there are a few bright spots.

2013 did not start on a positive note for the global server industry. According to a pair of analyst reports released this week, server shipments and revenues both declined in the first quarter of 2013.

IDC reported global first quarter 2013 server revenue to be $10.9 billion, which is a 7.7 percent year-over-year decline. World Server Report Gartner reported the revenue decline to be only 5.0 percent, coming in at $11.8 billion.

In terms of server shipments, IDC reported that 1.9 million units were shipped in 1Q13, which is a 3.1 percent year-over-year decline. In contrast, Gartner reported only a 0.7 percent decline in server shipments, with 2.3 million units.

"The first quarter of 2013 was certainly not a strong period for the server market on a global level," said Jeffrey Hewitt, research vice president at Gartner, in a statement.

Matt Eastwood, Group Vice President and General Manager, Enterprise Platforms at IDC, noted that ongoing consolidation and macroeconomic challenges are impacting the global server market.

"It is clear that challenging market conditions are increasing the competitive dynamics for server market share globally, particularly since compute represents a critical element of larger IT transformations that continue to reshape broader enterprise IT market opportunities," Eastwood said in a statement.

Linux, Unix and Windows

While overall global server revenues were down, Linux server revenues were up.

According to IDC, Linux server revenue grew by 3.4 percent year over year and now represents 23.1 percent of the total market.

In contrast, Microsoft Windows server hardware revenue declined by 4.2 percent, though Windows does still represent 52.2 percent of overall quarterly factory revenue.

Unix servers continued their steep decline, with a 35.9 percent drop in year over year revenues. Unix-based serves now represent 12.6 percent of quarterly server revenue.

This was the seventh consecutive quarter of revenue decline in the Unix server market, and all major Unix server vendors experienced a year-over-year revenue decline in the quarter when compared with the first quarter of 2012.


The title of top server vendor in the world depends on how the question is asked and who is answering the question.

According to Gartner, IBM is the top server vendor in the world by revenue. Gartner pegs IBM's 1Q13 server revenue at $3.02 billion and HP's $2.96 billion. In terms of server shipments, HP is the top server vendor, with 580,563 units shipped, and Dell comes in second with 516,355 units shipped.

IDC has a different view on the matter.

According to IDC, HP is the top server vendor in the world, with revenue coming in at $2.95 billion against IBM's $2.79 billion.

Of particular note in the IDC report is the three-way statistical tie for fourth place in server systems revenues. HP, IBM and Dell hold down the first three spots respectively. For fourth place, Fujitsu, Oracle and Cisco are all in a dead heat.

Cisco is the fastest-growing server vendor, though, with first quarter 2013 revenue growth of 34.9 percent, according to IDC.

Sean Michael Kerner is a senior editor at ServerWatch and InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals. Follow him on Twitter @TechJournalist.

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This article was originally published on Thursday May 30th 2013
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