HP Leads The Pack In IDC's Q4 Worldwide Server Revenue Results


As worldwide server revenue dipped 4.4 percent to $49.7 billion in the fourth quarter of 2013, Hewlett-Packard defied gravity with a 5.7 percent revenue jump, according to IDC's Worldwide Quarterly Server Tracker report. Competitors IBM and Dell slid into negative territory, with IBM seeing a 28.5 percent drop in revenue in the fourth quarter of 2013 compared with the previous year, according to IDC.  

IDC reported a statistical tie between HP and IBM for overall worldwide server market revenue share, with each owning a hair less than 27 percent of the market. Dell, which experienced a 2.4 percent hit to its server revenue in the fourth quarter of 2013 compared with the previous year, earned the No. 3 ranking with 14.5 percent of the global server revenue pie.

"HP had a great quarter. We are keeping an eye on whether HP is coming out of the woods and starting to fire on all cylinders as it starts to execute on its turnaround strategy. HP is clearly the big winner this quarter," said Jed Scaramella, research director for enterprise servers at IDC.

Related: Gartner Q4 Server Shipment Data: HP Beats Dell Again

According to IDC, this was the fourth consecutive quarterly decline for worldwide server revenue, ahead of a refresh cycle for midrange and mainframe servers expected in 2014. Demand for midrange and high-end systems saw sharp year-over-year revenue declines of 19.6 percent and 28.5 percent to $1.2 billion and $2.8 billion, respectively, in the fourth quarter of 2013, according to the IDC report.

The dip in midrange and mainframe revenue was offset considerably by year-over-year growth in the x86 hyperscale market, which saw an 8 percent revenue jump to $10.2 billion in fourth-quarter 2013. "IDC believes that the server market is very close to a tipping point, when hyperscale growth will be large enough to overshadow declines in the high end," wrote Kuba Stolarski, research manager, servers at IDC.

The rewards of that tipping point may not come soon for IBM. IBM's System z mainframes running z/OS saw revenue plummet 36.8 percent year over year to $1.1 billion in the fourth quarter of 2013. IBM's deal to sell its low-end x86 server business to Lenovo is expected to be finalized sometime later this year.

"Coming off the 2009 recession, midrange and high-end servers are due for a refresh. IBM and other companies see a lot of peaks and valleys when it comes to mainframe server sales," Scaramella said.

PUBLISHED FEB. 27, 2014