Plenty of DRAMa in server market

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Billy

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20 June 2018 | 0

Billy MacInnesThe latest server market figures from Gartner make cheering reading for most vendors, with worldwide server revenue growing 33.4% and a 17.3% increase in shipments in the first quarter of 2018. Notice that the revenue growth figures are double those for shipments which points to a marked increase in the average selling price (ASP) for servers overall.

In EMEA, revenue grew more or less in line with the global figure at 32.1% but this rise was on the back of a far smaller increase in shipments of 2.7%, suggesting there was a very significant increase in ASP indeed in this part of the world.

Gartner research vice president Jeffrey Hewitt noted that one of the drivers for the jump in ASP globally was “the fact that DRAM prices increased due to constrained supplies”. Still, there must have been another factor at play for EMEA because in North America the revenue increase of 34% came on the back of a 24.3% rise in shipments and in Asia/Pacific the revenue growth of 47.8% was as a result of a 21.9% increase in shipments.

Gartner research director Adrian O’Connell says the differences in regional performance are probably because “the different regions have quite different customer segments with different buying cycles, so that’s playing a part in influencing the current revenue trends”.

In terms of vendor performance, Dell EMC grabbed top spot in shipments and revenue, mainly due to a marked decline in revenue from the previous number one vendor HPE. By my calculation, Dell EMC’s ASP increased by 21% to $6,466.30. Nevertheless, despite its fall to number two in the rankings, HPE had the highest ASP of $8,283.42, an increase of 15%.

The figures also highlighted the dramatic impact of Inspur Electronics on the server market globally as the top server vendor in China. The company grew revenue by 120.4%, taking it to third place overall with a 7.1% market share. Last year, it wasn’t in the top five at all. In terms of shipments, Inspur leapfrogged Huawei and Lenovo to gain third place. The increase in ASP for Inspur Electronics was even more pronounced than for Dell EMC and HPE, rising by 35% to $5,933.75.

The ‘others’ category experienced only a slight rise in ASP of just over 3%.

IBM didn’t make the top five in terms of shipments but placed fifth in revenues. However this represents a significant decline on Q1 2017 where it was third. According to Gartner, Cisco, which was fourth in terms of revenue in Q1 2017, has dropped out of the top five altogether.

By contrast, IDC’s figures for Q1 2018 have Dell EMC and HPE in a “statistical tie” for top spot by revenue because there is less than 1% difference in revenue share between the two. It has Lenovo, IBM and Cisco in joint third place. There is no room for Inspur although the revenue estimates from IDC for all three of those companies is below the figure Gartner attributes to Inspur. However, IDC does have Inspur in joint third with Lenovo and Super Micro in terms of shipments.

O’Connell remarks that the reason Cisco has fallen to sixth in Gartner’s server rankings is because the year on year trends have favoured Inspur more, “plus the China-based vendors are benefiting the most from the strength of the Chinese market”.

It will be interesting to see whether Inspur continues to make ground in the server market over the year and if IBM stays in the top five by revenue despite being outside it in terms of volume. And will Dell EMC stay in top spot or can HPE bounce back?

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