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Revenue down despite strong fourth quarter for server market

The worldwide server market had a strong fourth quarter in 2019, despite shipments and revenue declining for the full year. 

According to analyst firm Gartner, server market revenue increased 5.1%, while shipments grew 11.7% year over year. In all of 2019, worldwide server shipments declined 3.1% and server revenue declined 2.5% compared with full-year 2018.

In Australia, server revenue decreased 5.1% in the fourth quarter of 2019, while shipments declined 6.5% year over year. For the full year 2019, server revenue decreased 10.3%, while shipments grew by 2.9% compared with full year 2018.

 “The market returned to growth with a very strong fourth quarter result, largely driven by a return of demand from hyperscalers,” says Adrian O’Connell, senior research director at Gartner. 

“However, the outlook for the worldwide server market in 2020 is subject to great uncertainty. The impact of the coronavirus (COVID-19) outbreak is expected to temper forecast growth. Although demand from the hyperscale segment is expected to continue through the first half of the year, other buying organisations’ reactions will vary," he explians.
 
Dell EMC secured the top spot in the worldwide server market based on revenue in the fourth quarter of 2019. Despite a decline of 9.9% year over year, Dell EMC secured 17.3% market share, followed by Hewlett Packard Enterprise (HPE) with 15.4% of the market. IBM experienced the strongest growth in the quarter, growing 28.6%. 

Table 1
Worldwide: Server Vendor Revenue Estimates, 4Q19 (U.S. Dollars)

Company

4Q19

Revenue

4Q19 Market Share (%)

4Q18

Revenue

4Q18 Market Share (%)

4Q19-4Q18 Growth (%)

Dell EMC

3,986,574,446

17.3

4,426,376,226

20.2

-9.9

HPE

3,551,891,310

15.4

3,887,881,501

17.8

-8.6

IBM

2,294,258,503

10.0

1,783,691,221

8.1

28.6

Inspur Electronics

1,831,676,801

8.0

1,801,622,141

8.2

1.7

Huawei

1,488,740,004

6.5

1,815,071,726

8.3

-18.0

Others

9,860,302,857

42.8

8,186,405,788

37.4

20.4

Total

23,013,443,922 

100.0 

21,901,048,604 

100.0 

5.1 

Source: Gartner (March 2020)

In server shipments, Dell EMC maintained the No. 1 position in the fourth quarter of 2019 with 14.2% market share. HPE secured the second spot with 10.8% of the market. Both Dell EMC and HPE experienced declines in server shipments, while Lenovo experienced the strongest growth with a 22.4% increase in shipments in the fourth quarter of 2019. 

Table 2
Worldwide: Server Vendor Shipment Estimates, 4Q19 (Units)

Company

4Q19

Shipments

4Q19 Market Share (%)

4Q18

Shipments

4Q18 Market Share (%)

4Q19-4Q18 Growth (%)

Dell EMC

549,552

14.2

580,580

16.7

-5.3

HPE

417,699

10.8

424,422

12.2

-1.6

Inspur Electronics

296,934

7.7

293,702

8.5

1.1

Huawei

267,157

6.9

260,193

7.5

2.7

Lenovo

233,893

6.0

191,032

5.5

22.4

Others

2,113,167

54.5

1,723,032

49.6

22.6

Total

3,878,402

100.0

3,472,961

100.0

11.7

Source: Gartner (March 2020)

 

In 2019, both worldwide server shipments and revenue declined, with shipments falling 3.1% and revenue down 2.5%

Dell EMC took the top spot in both revenue and shipments with 20.5% market share and 16.3% market share, respectively. HPE secured the No. 2 position with market share of 17.3% in revenue and 12.3% in shipments. Inspur Electronics is the only vendor in the top five that grew in both revenue and shipments in 2019.