Server revenues rise in EMEA on fewer sales

Global server shipments up 1.4 per cent in Q1

Q1 saw server revenues shrink 4.1 per cent despite a 1.4 expansion in shipments around the globe – but not in EMEA.

Analyst giant Gartner found that revenues in EMEA from server sales actually rose 2.5 per cent to $3bn (£1.8bn) in the first quarter of 2014, compared to the year-ago quarter, with 547,900 units sold.

Adrian O'Connell, research director at Gartner, said the number of shipments in EMEA actually represented a decrease of 6.1 per cent, even though revenues expanded for the first time after 10 consecutive quarterly year-over-year declines.

"The fact that the server market has finally shown revenue growth will be a welcome relief for server vendors. The business environment in EMEA remains challenging, but the severe declines that we've witnessed in the non-x86 product segments have abated, at least in the first quarter of 2014," O'Connell confirmed.

Sales in Eastern Europe shrank the most in revenue terms, declining 14.5 per cent in Q1 from Q1 of 2013. Server revenues in the Middle East and Africa slid 3.6 per cent.

Server sales in Western Europe achieved a 6.7 per cent rise on the year-ago quarter in revenue terms. HP extended its lead by boosting revenues 5.1 per cent.

"HP continued to improve its execution and also benefited from its competitors' difficulties. Second-ranked IBM continued to suffer from cyclically weak product lifecycles, but its 8.7 per cent decline was also compounded by additional weakness for its x86 business," he indicated.

"Third-placed Dell suffered when compared to a particularly strong first quarter in 2013."

X86 server revenue increased 3.4 per cent across EMEA, while RISC/Itanium UNIX revenue fell 3.4 per cent and revenue from servers with other types of CPU rose 8.6 per cent.

"Platform migrations continued to be a factor but the rate of these declines has slowed and the worst rates of decline may be behind us," O'Connell said.

"We are likely to see revenue growth in 2014, but the reality is that the market is operating from a significantly lower level than it was prior to the downturn in 2008."

All regions around the globe saw a decline in either shipments or revenue – except for Asia-Pacific, which posted a 3.3 per cent increase in revenue and an 18 per cent increase in shipments.