The server market is vital for enterprise and SMEs, supporting vital workloads, but growth appears to have stalled. No doubt spending would be much higher if the self-built systems of the largest cloud computing weren’t continuing to eat up commercial workloads. Within the market the leading vendors – Dell EMC and HPE – have pulled away from others at the top, while the competition is growing from the success of Chinese suppliers Lenovo and Huawei (see my Figure above which shows the revenues of the main players in $US billions on a rolling four quarter basis). In the year to the end of June 2021 users paid out $74b billion for 21 million machines, with a total of 71 million installed in their data centers and offices. Sales declined by only 1% in the quarter and by 2% for the annual period.
Over the years x86 processors have grown in maturity and success and now account for 86% of spending and, due to their typically smaller average size, a massive 99% of unit shipments. IBM leads the RISC/other processor market through its continued investment in S/390 and Power chips. Oracle is the next largest supplier on account of its Sparc chips, while HPE and others still make some revenues from Itanium machines. Servers using ARM processors are becoming more important, although most of these are also used in those large self-built systems run by the largest cloud suppliers; it’s possible that commercially produced versions of these could grow this part of the market in future.
In the x86 part of the server market the growth of Chinese suppliers Huawei and Lenovo have been curtailed by US government sanctions, while European users appear content to use servers from foreign suppliers. Atos (having bought Bull in 2014) is almost ‘the last man standing’ of a worthy list of earlier companies such as Siemens, ICL, Olivetti.
The Americas – and particularly the USA – is where servers are most popular. Sales there were worth $30 billion in the year – 41% of the world market. Asia Pacific accounted for 31% and EMEA, 28%. See my Figure above for the annual spending in each region since 2005, with a forecast for the whole of 2021.
I show market shares for each of the regions in my Figure above. Dell EMC’s overall lead in the world market is due largely to its tremendous success in the Americas. HPE is currently more international – leading both in EMEA and Asia Pacific. Huawei is the second largest supplier in Asia Pacific due mainly to its strong presence in its home country China.
Corporate computing is now about balancing capital v operational spending as well as on-premise and cloud-based resources. I believe that the server market will stay strong for years despite the competition from IaaS, PaaS and SaaS. In fact successful companies will be able to deploy their applications on a variety of hardware, shifting from one to another as easily as they can to take advantage of expertise (AI for instance), lower prices (most often internal resources) and/or budgetary constraints or investments.
Information Technology and Communications research
