EMEA server spending declines 12.9% on year, says IDC

IDC’s EMEA Server Tracker shows that in the fourth quarter of 2016 the EMEA server market reported an on-year decline in vendor revenues of 12.9% to EUR$3.4 billion (US$3.62 billion) and an on-year decrease of 4.7% in units shipped to just under 600,000. Looking at the EMEA market in euros, reported revenues in the fourth quarter of 2016 declined 11.7% on year.

When viewing the EMEA market by product, the biggest decline was seen in custom rack optimized server units and revenues, which decreased 38.1% and 39.9% respectively. Although relatively unchanged on year, standard rack optimized servers recorded the highest overall shipment numbers at 294,000 units, while large system servers saw the highest on-year shipment increase of 21.9% to 1,706 units.

"The ODM market continues to show strength as it gains another percentage point share in Western Europe in the fourth quarter of 2016. This continued growth from the ODM market is indicative of the continued drive toward cloud, be it through well-established tier-1 providers, smaller service providers, or the hoster community in Western Europe," said Eckhardt Fischer, senior research analyst, European Infrastructure, IDC.

Regional highlights

In terms of vendors, with 33.9% market share Hewlett-Packard (HP) remained at the top of the Western European server market, while second place Dell increased market share on year from 16.9% to 17.8% in the fourth quarter of 2016.

"An overall revenue decline in the fourth-quarter-2016 Western European server market was fueled by mild earnings decreases across most major vendors. In particular, revenues for IBM declined by 33.7%, due in part to non-x86 refresh cycles and the continuing trend of declining non-x86 shipments," said Michael Ceroici, research analyst, European Infrastructure, IDC.

Finland, Ireland, and the Netherlands were the worst performers in the fourth quarter, with on-year revenue declines between 25% to 35% as both pressure from ODMs and slowed purchasing cycles from major service providers continue to create a turbulent market environment. With 20.5% on-year revenue growth Italy outperformed its neighbors, while Switzerland saw an increase of 30.3% in shipments due to some large investments in the high performance computing market, such as the expansion of the Swiss National Supercomputing Center.

"Central and Eastern Europe, the Middle East, and Africa (CEMA) server revenues declined by 16.8% on year to EUR$730.63 million in the fourth quarter of 2016. A limited number of infrastructure projects in the public space as well as the declining installed base of non-x86 servers were the major inhibitors in the last quarter of the year," said Jiri Helebrand, research manager, IDC CEMA. "The Central and Eastern Europe (CEE) sub-region declined by 25% on year with revenues of EUR$351.53 million due to the lack of demand in the public sector in Poland and Czech Republic, and a substantial reduction of non-x86 server sales in Russia. Pockets of demand were recorded among the service providers that continue to invest in off-premise infrastructure buildouts."

Helebrand said the Middle East and Africa (MEA) sub-region declined by 7.5% on year to EUR$379.1 million and fared much better than the CEE and Western European regions. "The delivery of an HPC project in the oil and gas industry as well as demand from the telecommunication and banking sectors drove demand in the MEA region. Israel was among the best performing countries, driven by sales to the public sector and service providers. Qatar and Kuwait also recorded strong double-digit growth, benefiting from demand in the finance sector," Helebrand said.

Source: IDC, compiled by Digitimes, March 2017

Categories: IT + CE Server, IPC, cloud computing

Tags: Africa Europe IDC Middle East revenues server shipments

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