Cloud providers drive server sales back to growth

Leader HPE sees revenue drop as ODMs strengthen dominance

Increased activity from hyperscalers and cloud service providers returned the server market to growth in Q2 this year, according to IDC.

The analyst's figures show that worldwide server sales were up 6.3 per cent year on year to $15.7bn (£11.7bn), returning the market to growth after "several slow quarters".

"Hyperscalers as a group made a large deployment push in the second quarter led by Amazon, which alone accounted for more than 10 per cent of server units shipped in the quarter," said IDC research director Kuba Stolarski.

"As hyperscalers tend to lead the market on most architectural updates, we expect the rest of the market to catch up over the next several quarters.

"As the market cycles through this refresh, we are seeing changes in vendor portfolios with new modular system designs and a greater focus on accelerator technologies, as well as the continued evolution of the role of cloud services in corporate IT."

HPE remained top of the pile for the big five vendors with revenue of $3.3bn, but this was down 8.4 per cent on the previous year.

Dell remained in second place, with revenue up seven per cent to $2.8bn.

However, the ODM players continued to assert their dominance over the household names, with their combined revenue up 48.1 per cent to $3.5bn, taking them to a dominant market share of 22.6 per cent.

IBM was hit hardest, with revenue down 20.8 per cent to just over $1bn.

For the first time IDC broke out specific figures for Super Micro, with the vendor tipped as seeing 49.8 per cent year-on-year revenue growth, taking it to $448m.

Lloyd Cohen, director of computer platforms analysis at IDC, said: "ODM shipments continue to gain share as large datacentres find it attractive to custom-build their server designs at attractive volume prices.

"Demand for two-socket form factors continues to control a majority of unit shipments now and going forward as they are the sweet spot for density-optimised servers which are used in datacentres."