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According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, vendor revenue in the worldwide server market increased 12.6% year over year to $23.6 billion during the fourth quarter of 2018 (4Q18). Worldwide server shipments increased 5.0% year over year to just under 3.0 million units in 4Q18.
The overall server market continues to experience robust demand with 4Q18 marking the fifth consecutive quarter of double-digit revenue growth and its highest total revenue in a single quarter ever. Volume server revenue increased by 17.8% to $19.0 billion, while midrange server revenue grew 30.3% to $2.5 billion. High-end systems declined 28.3% to $2.1 billion.
"Reduced demand from hyperscale companies created downward pressure on worldwide server market growth rates during the quarter," said Sebastian Lagana, research manager, Infrastructure Platforms and Technologies at IDC. "This was offset by increased server sales to enterprise customers and higher average selling prices (ASPs). Enterprises are buying richly configured servers to support resource intensive workloads, resulting in higher ASPs and pushing revenue growth higher than growth from unit shipments."
Overall Server Market Standings, by Company
Tied* for the number one position in the worldwide server market during 4Q18 were Dell Inc., at 18.7% revenue share, and HPE/New H3C Group, with 17.8% revenue share, growing 20.4% and 10.5% year to year respectively. IBM was the third-ranked server supplier during the quarter capturing 8.3% of total server revenues. IBM's performance during the quarter excludes sales generated through the company's recently established partnership with Inspur Power Systems. Inspur/Inspur Power Systems and Lenovo tied for fourth with revenue shares of 6.6% and 6.2% respectively. Inspur/Inspur Power Systems increased its revenue 70.7% year over year and Lenovo increased its revenue 33.8% year over year. The ODM Direct group of vendors accounted for 20.1% of total revenue, up 11.6% year over year to $4.7 billion. This was an uncharacteristically low growth rate for this group of companies. Dell Inc. led the worldwide server market in terms of unit shipments, accounting for 19.4% of all units shipped during the quarter.
Top Server Market Findings
On a geographic basis, Asia/Pacific (excluding Japan) was the fastest growing region in 4Q18 with 25.5% year-over-year revenue growth. Latin America grew 15.4% during the quarter, while the Europe, the Middle East and Africa (EMEA) region grew 15.2% on aggregate. Japan grew 5.3% in 4Q18, the United States grew 5.1%, and Canada declined 5.7%. China saw its 4Q18 vendor revenues grow 30.7% year over year.
Demand for x86 servers increased 18.7% in 4Q18 to $21.1 billion in revenue. Non-x86 servers contracted 21.6% year over year to $2.5 billion.
About IDC Trackers
IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools.
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 wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and engages the most influential technology buyers.