Price hikes fail to halt server bandwagon

Unit shipments in EMEA rise for fourth consecutive quarter despite price adjustments from major vendors

Local price hikes from major vendors failed to blow the strengthening EMEA server market off course in the first quarter of 2105, according to IDC.

In the first three months of the year, EMEA server shipments grew 3.5 per cent year on year even as the big players adjusted their price structures on this side of the Atlantic to compensate for the strengthening dollar, the market watcher said.

This marks the fourth consecutive quarter of year-on-year unit shipment growth in EMEA. Server revenues rose even more briskly, at 6.3 per cent, as a move towards richer configurations fuelled a rise in vendor average selling prices.

Rival market watcher Gartner recently slashed its global IT growth forecast for 2015 due to the strengthening dollar.

But Giorgio Nebuloni, associate research director, European Infrastructure, at IDC, said: "The macroeconomic fundamentals have remained strong and despite all major players having executed strong pricing adjustments to make up for the falling euro, server demand has not slowed down."

"New projects in the cloud space have combined with a fairly broad infrastructure refresh on latest-generation x86 chips, especially in large global organisations," he added.

The non-x86 market also built on the positive signals seen in Q4, IDC said, as the market grew for the first time in 15 quarters in revenue terms, reaching $526m (£339m). Volume shipments for non-x86 more than doubled year on year thanks to the second shipment of ARM-based servers into the EMEA region, the market watcher said, although IDC added that these systems generate less than one per cent of the non-x86 market.

HP remained the EMEA market's 800-pound gorilla despite being the only top-five vendor other than IBM to see revenues fall on an annual comparison. Its market share slipped to 35.1 per cent, ahead of Dell on 17.2 per cent, IBM on 11.1 per cent, Lenovo on 7.5 per cent and Cisco on 6.9 per cent

"A number of major vendors that experienced transition periods in the past year managed to recover from the temporary declines seen previously and are actively building out their channel partnerships across our region," said Andreas Olah, senior research analyst, European Infrastructure, at IDC.

"At the same time, the rise in ODMs continues to put increasing pressure on established players, while competition is also heating up in niche areas with more vertical and workload-specific models emerging. This trend drives the convergence of form factors and continuous advances in the hyper-converged space."