Observations on Q3 2017 Gartner report servers

by ramdas published Jan. 25, 2018, midnight


The server market continues to grow despite pressure from public cloud vendors

The latest Gartner Server shipment study throws up a few surprises.

Dell EMC has overtaken HP as the market leader. Dell has been very aggressive in both pricing and product positioning last few quarters. Since going private a few years back, Dell has been far agiler than HP and other enterprise vendors. HP is still the global leader in terms of revenues.

Not very well known outside China and the United States, Inspur Electronics used to be regarded as another white box OEM. However, this server manufacturer which very religiously builds servers based on Intel's roadmap has now overtaken Cisco, Huawei and Lenovo to become the third largest manufacturer of servers worldwide. Shipping just over 200,000 units and notching over a billion in revenues, Inspur is giving global brands a run for their money.

About three years back I had a meeting with an Inspur executive who was exploring opportunities in India. And though the pricing was much lower than Dell or HP, we never connected back because of less acceptance of a Chinese brand for a mission-critical requirement.  However, I hear that they have scored a few cases in India because of their aggressive pricing. 

Despite selling off the x86 server business IBM still continues to be a very significant player in this space.  IBM has a very compelling story with their Power series, and with rest of the players steadily declining in the UNIX market, IBM is the third largest vendor in terms of revenues. The mainframe business grew at 50 percent too.

Lenovo has lost significant market share at 33 percent. I am very surprised that Lenovo has not been very aggressive with their server business. After buying out IBM's x86 server unit(X Series), there has been little visible innovation whether in product portfolio or marketing strategies. I am told that both Dell and the other Chinese vendors have poached several customers and partners.

Despite virtualization workloads growing and public cloud market booming, I am surprised we still see growth in the server market. With Intel launching the new xeon Scalable series in the next two years there would be significant technology refresh cases in the space too.

 
Worldwide: Server Vendor Shipments Estimates, 3Q17 (Units)


Company


3Q17

Shipments


3Q17 Market Share (%)


3Q16

Shipments


3Q16 Market Share (%)


3Q17-3Q16 Growth (%)


Dell EMC

502,845

17.8

452,383

16.8

11.2

HPE

462,777

16.4

492,273

18.3

-6.2

Inspur Electronics

203,306

7.2

119,943

4.5

69.5

Lenovo

151,575

5.4

228,097

8.5

-33.5

Huawei

145,441

5.1

163,355

6.1

-11.0

Others

1,362,727

48.2

1,234,567

45.9

10.4

Total


2,828,617


100.0


2,691,618


100.0


5.1


Source: Gartner (November 2017)