The global server market has demonstrated a steady rise in the past few decades. The server market demand has remained positive, attributed to the ongoing enterprise refresh cycle along with the continued infrastructure investments from cloud service providers. In 2014, the global server shipments increased by over 2 million units as compared to 2013 showing a high record.
According to 2014 estimates, good market growth in the volume system revenue was recorded. The global worldwide server market was driven by the continued expansion of x86 hyper-scale server infrastructure. On the other hand, midrange systems were aided by enterprise investment in scalable systems for consolidation and virtualization. Moreover, in 2014, the demand for high-end systems witnessed a revenue decline in advance of the major IBM z Systems upgrade announcement.
In October 2014, IBM closed their divestiture of x86 server business to Lenovo. IBM was one of the top 3 x86 server market players globally with revenue of US$4.7 billion in 2013. By acquiring IBM’s server hardware business, Lenovo acquired all of IBM’s x86 server product lines, all blade networking technology assets, converged systems and solutions associated with x86, and maintenance services business related to the above products. Furthermore, Lenovo benefitted from the additional strategic relationship with IBM which covered the resale of attached storage products.
IBM’s x86 server business provided important assets and capabilities such as a competitive and comprehensive portfolio of x86 server products with associated system networking products, world-class R&D, engineering expertise, trusted premium product brand, etc. By focusing on the attractive market segment of x86 servers, Lenovo aimed to create a new profit pool.
It is forecasted by market analysts that the global x86 servers market will expand at approximately 4% CAGR during the forecast period of 2014 to 2020. By 2017, China is anticipated to contribute around 20% of the global x36 server market volume.
HP held the number one spot in the global server market in 2014 with over 25% market share in factory revenue. HP experienced robust demand for its x86 based ProLiant servers, especially from the Asia Pacific, and EMEA. Dell moved to the second position in the global server market for the first time after following a server revenue growth of over 10% year-over-year and held a factory revenue market share of over 15% in 2014.
The third spot in the global server market went to IBM with over 12% market share in 2014. A majority of IBM’s revenue decline was due to the divestiture of its server business of x86. However, IBM did witness a double-digit year-over-year decline for its z System and POWER Systems mainframes. The fourth position was held by Lenovo, while the fifth was held by Cisco in the same year.
2014 was a moderate growth year for the global server market with an over 2% increase in the total shipments. Globally, x86 servers will continue to be the dominating platform for large-scale data center build-outs. Additionally, the growth of the integrated systems through minor will contribute to the modest growth of the x86 server market in 2015.