Server Market Highlights Q3 2012
- In the year to September 2012 the total server market dropped 7% to $57.5 billion
- HP led the market with a 23.9% share worth $13.7 billion
- Large companies accounted for 53.4%, Medium for 13.9% and Small for 30.7% of server spending
- The x86 server market fell 4% to $42.2 billion
- HP led the sector with a 28.8% share ($12.2 billion)
- In Q3 2012 the total server market fell 6% to $13.9 billion
- The x86 server market dropped 4% to $10.4 billion
It’s been a busy week for ITCandor publishing our assessments of ITC submarkets. We’re proud to present our findings for the server market in this article. You’ll want to know more about how business developed in Q3 2012 and in the full year to the end of September. If you want more details you should consider purchasing our tracker, which contains full details of vendor, processor type, operating system and country business.
HP Leads The Falling Server Market
The server market has been doing badly in the current Euro Crunch recession, falling 7% to $57.5 billion. As always the market is headed up by HP and IBM: the latter taking a 23.9% share ($13.7 billion) of revenues in the year to the end of September and IBM 19.5% ($11.2 billion). Dell has been on the rise over the last few quarters and finished the year in third position with a 13.8% share worth $6.0 billion. Other suppliers have much smaller shares – Sun/Oracle 4.4%, Fujitsu 2.5%, Cisco 1.9% and Bull1.1.8%. IBM has the most varied offerings, selling its mainframes and Power-based servers alongside x86-based System x machines, HP has a diminishing business in Itanium-based products alongside its x86 Proliant machines, while all of Dell’s PowerEdge servers are x86-based machines. See Figure 1 for details.
Dell Challenges HP In The x86 Server Market 
HP’s lead has been a long-term feature of the x86 server market: in the year to the end of September it help a 28.8% ($12.2 billion) share. Dell has been growing its share steadily each quarter, achieving an 18.8% share ($7.9 billion) for the year. IBM was in third position with a 6.5% ($2.7 billion share). Other vendors have much smaller shares – Cisco 2.6%, Fujitsu 2.2%, Teradata 2.1% and Acer 2.1% (see Figure 2).
Large Companies Account For 53.4% Of Server Sales 
We look at the proportion of servers being purchased by different sized companies. Large companies (those with over 1k staff) spend the most, accounting for 53.4% of all server purchases in Q3 2012; Medium companies (those with between 100 and 1k employees) accounted for 15.9%, while Small companies (those with less than 100 employees) took 30.7% of the market. While spending overall has moved towards smaller companies over a long-term period, the balance of product types has evened out: in particular x86 servers now sell well across all sizes of company, rather than typically being used in small and medium businesses. There are tens of thousands of x86-based servers being used in public Cloud and hosting companies – Rackspace, for instance, reports that it had over 89k in use at the end of September; Facebook, Google, Twitter of course each have many more.
Some Conclusion – A Shift Towards Converged Infrastructure And Integrated Systems
Servers remain at the heart of data centre and IT markets, but are failing to grow as a submarket. Their success is very much dependent on the state of the economy – as capital assets users tend to reduce spending in difficult economic times. As we look out to the future so we expect servers to be increasingly bundled with storage, networking and management software, which may well reduce their importance as an offering in their own right. We are in the process of designing a multi-client study to look into the development of Converged Infrastructure, which should in turn help us to forecast the contributing product types in detail. Please contact us if you’d like to participate.