Home / Dell EMC / Dell EMC and HPE vie for top spot in server market, trading revenue and shipment lead – CIO Dive

Dell EMC and HPE vie for top spot in server market, trading revenue and shipment lead – CIO Dive

Dive Brief:

  • The second quarter of 2017 saw a 2.8% year-over-year increase of global server revenue and 2.4% year-over-year increase in shipment growth, according to a Gartner report. The revenue total of the top five server providers — HPE, Dell EMC, IBM, Cisco and Huawei — was $8.6 billion, accounting for more than 60% of total market revenue. 
  • Hewlett Packard Enterprise (HPE) revenue fell 9.4% year-over-year, but the company remains the top server provider with $3.2 billion in revenue. Dell EMC came in second with a revenue increase of 7% year-over-year and $2.8 billion in revenue followed by IBM with about $1 billion in revenue.
  • Dell EMC and HPE traded spots when it came to server shipments. Dell EMC took the top spot, accounting for 17.5% of the server market, and HPE came in second with 17.1% of the market. 

Dive Insight:

The Gartner report comes a year after Dell’s historic merger with EMC Corp. that created Dell Technologies. Dell Technologies was projected to take over the IT infrastructure market, which includes servers and storage devices. In 2015, before the merger, EMC already had a stronghold in the storage market, accounting for 19.2% of the market followed by HPE’s 15.5% and Dell’s 9.7%. 

Though Dell EMC still trails HPE in server revenue, the company’s lead in shipments reflects positive growth and the potential for leading the market in revenue in the future. However, both companies are also competing in the cloud space. Last year, HPE held its spot as the number one cloud infrastructure provider, but that was before Dell Technologies could test its presence in the market. 

In contrast to last year’s Q2 report, where global server revenue fell 0.8% year-over-year, there was an uptick in this year’s report. As a whole, the server market is having to respond to market needs as more companies store data through cloud providers over traditional, on-premise systems.

However, migration can be slowed as 60% of current IT spending still goes to onsite infrastructure, including private servers. Nonetheless, resistance to cloud migration in favor of traditional servers is not a long-term solution for the enterprise.

Companies like VMware are capitalizing on that resistance to ease the transition from server-based workloads to the cloud by extending partnerships with public clouds like IBM Cloud and Amazon Web Services. VMware, a traditional software provider for enterprises, has created hybrid cloud offerings to maintain its presence in enterprise data. Legacy servers may be tasked with similar initiatives.

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