EMEA server spending decreases by 3.7% on year in 2Q16,…

As reported in IDC’s EMEA Server Tracker, in the second quarter of 2016 the EMEA server market reported a moderate on-year decline in vendor revenues of 3.7% to EUR3 billion (US$3.37 million) and a slight on-year increase of 0.8% in units shipped to just over 530,000.

Looking at the EMEA market in euros, reported on-year revenues in the second quarter of 2016 declined by 5.7%. Currency instability may continue to play a role in pound- and euro-denominated revenues, as the long-term impact of Brexit on Western European IT markets remains to be seen.

The EMEA non-x86 market showed further negative signals in the second quarter of 2016. Vendor revenues were down 29.3% on-year in the quarter, reaching just over EUR400 million, as CISC, EPIC, and traditional RISC machines all showed double-digit declines.

In consideration of product detail, standard density optimized server units and revenues decreased by 34.8% and 44.4% respectively. Custom density optimized servers continue to outperform other models, with shipments increasing 51.9% in the second quarter of 2016 and revenues increasing by 22.8%.

"This is strongly driven by the continued expansion of original design manufacturers (ODMs) in EMEA, a trend that IDC predicts will continue as mega datacenters and larger enterprises begin to source their hardware directly," said Eckhardt Fischer, research analyst, European Infrastructure, IDC. An interactive graphic with this product breakdown is available here.

Regional highlights

"The tempered performance of the second-quarter-2016 Western European server market was party fueled by a significant revenue decrease for IBM (-36.9%), due in large part to the refresh cycle of legacy mainframe units in the second quarter of 2015. As the largest player in the non-x86 segment (68.9% of second-quarter-2016 EMEA revenues), the drop had a noticeable impact on overall units and revenue for the quarter," said Michael Ceroici, research analyst, European Infrastructure, IDC. At the top of the vendor list, Hewlett-Packard (HP) maintained its position as market leader in Western Europe with 35.3% market share. A noteworthy category was Others, comprising tier-2 and ODM vendors, which increased in market share in Western Europe from 21.3% to 24.5%.

"Central and Eastern Europe, the Middle East, and Africa (CEMA) server revenues declined for the fifth consecutive quarter, falling by 5.5% to EUR607 million in the second quarter of 2016. A slowdown in the non-x86 product line after a major refresh a year ago and a limited number of large deals in the region weighed negatively on server sales. The Central and Eastern Europe (CEE) sub-region declined by 1.3% on year with revenues of EUR264 million. Russia and Ukraine recorded strong growth as the region’s geopolitical situation stabilized and IT infrastructure investments resumed. The Middle East and Africa (MEA) sub-region declined by 8.5% on-year to EUR343 million, as IT projects continued to be scaled back due to an unfavorable economic situation impacted by low oil prices. Turkey outperformed strongly, recording double-digit growth driven by demand for converged infrastructure in telecom and finance verticals," said Jiri Helebrand, research manager, IDC CEMA.

Source: IDC, compiled by Digitimes, September 2016

Categories: IT + CE Server, IPC, cloud computing

Tags: 2Q16 Africa Europe IDC Middle East server

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