EMEA server spending decreases by 3.7% YoY in 2Q16, according to IDC


Sep 20, 2016

FRANKFURT, September 19, 2016 — As reported in International Data Corporation's (IDC) EMEA Server Tracker, in the second quarter of 2016 the EMEA server market reported a moderate year-on-year (YoY) decline in vendor revenues of 3.7% to $3.0 billion and a slight YoY increase of 0.8% in units shipped to just over 530,000. The top 5 vendors in EMEA and their revenues for the quarter are displayed in the table below.

Top 5 EMEA Vendor Revenues ($M)

Vendor 2Q15 Server Revenue 2Q15 Market Share 2Q16 Server Revenue 2Q16 Market Share 2Q15/2Q16 Revenue Growth
HPE 1,088 35.0% 1,058 35.4% -2.7%
Dell 527 17.0% 536 17.9% 1.6%
IBM 439 14.1% 277 9.3% -36.9%
Lenovo 230 7.4% 209 7.0% -8.9%
Cisco 164 5.3% 194 6.5% 18.4%
Others 660 21.2% 718 24.0% 8.8%
Total 3,106 100.0% 2,992 100.0% -3.7%

Source: IDC Quarterly Server Tracker, 2Q16

Looking at the EMEA market in euros, reported YoY revenues in 2Q16 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 2Q16. Vendor revenue was down 29.3% YoY in the quarter, reaching just over $400 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 2Q16 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 2Q16 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 2Q16 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, HPE 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 revenue declined for the fifth consecutive quarter, falling by 5.5% to $607 million in 2Q16. 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) subregion declined by 1.3% YoY with revenues of $264 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) subregion declined by 8.5% YoY to $343 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.

Link to product sheet for the tracker: http://www.idc.com/tracker/showproductinfo.jsp?prod_id=7

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