Dell And HPE Fight For Server Share Dominance: Top 5 Server Leaders

‘As long as demand for richly configured servers supports further average selling price growth, the market will offset slight declines in unit volume,’ says Sebastian Lagana, research manager, Infrastructure Platforms and Technologies at IDC.

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Dell Technologies vs. HPE Servers

Organizations around the globe continue to invest in server spending as global market sales increased to $19.8 billion in the first quarter of 2019, up 4.4 percent year over year, according to IT research firm IDC.

However, worldwide server shipments declined 5.1 percent year over year to just shy of 2.6 million server units.

"Year-to-year average selling price (ASP) increases supported revenue growth for many vendors,” said Sebastian Lagana, research manager, Infrastructure Platforms and Technologies at IDC in a statement. “As long as demand for richly configured servers supports further ASP growth, the market will offset slight declines in unit volume."

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Dell Technologies

Q1 Market Share: 20.2%

The $91 billion Round Rock, Texas-based infrastructure giant once again took home the crown for worldwide server market share leader. Dell Technologies generated nearly $4 billion in server sales during the first quarter 2019, up 9 percent year over year. Dell’s market share increased from 19.3 percent share in first quarter 2018 to 20.2 percent.

Dell also shipped the most server units in the first quarter with 517,000 server shipments around the globe, representing 20 percent of all servers shipped in the quarter. Although Dell’s server shipments were down 7 percent year over year, the company’s drop was smaller than all its major competitors including HPE, Inspur, Supermicro and Lenovo. For x86 servers, Dell Technologies held the No. 1 position for revenue for the seventh consecutive quarter and in volume units for the past 10 quarters.

Last week, Dell reported first fiscal quarter earnings of $21.9 billion in revenue, up 3 percent year over year. However, the company’s server and networking revenue dropped 9 percent year over year to $4.2 billion. Dell executives said the server revenue decline was mainly due to a sales fall in China.

Hewlett Packard Enterprise

Q1 Market Share: 17.8%

The $31 billion San Jose, Calif.-based company took home the silver medal for global server market share at 17.8 percent by generating $3.5 billion in revenue for the first quarter 2019, representing flat server sales growth year over year. HPE’s flat revenue led to the company’s market share to drop from 18.5 percent in first quarter 2018 to 17.8 percent.

HPE shipped the second most server units in the first quarter by shipping a total of 406,000 servers, down 11 percent from the 455,800 servers it sold during the same quarter one year ago. HPE’s server unit shipment market share lowered from 16.7 percent in first quarter 2018 to 15.7 percent year over year.

For its recent second fiscal quarter, HPE reported total revenues of $7.2 billion, down 4.3 percent, year over year. Compute revenue was down 5 percent year over year during its second quarter. Excluding the impact from the company’s intentional exit of certain tier-1 customer segments, computing revenue was up 4 percent year over year, according to HPE.

Inspur

Q1 Market Share: 6.2%

China’s server leader Inspur came in third place with worldwide server revenue of $1.2 billion, up a whopping 36 percent year over year. Inspur captured 6.2 percent market share during the first quarter 2019, up from 4.7 percent share one year ago, which represents the highest share gain in the industry.

The China-based company also shipped the third most servers during the quarter with 204,900, up 17 percent from the 175,000 servers it shipped in first quarter 2018. Inspur’s server unit shipment share increased from 6.4 percent to 7.9 percent year over year. Inspur was the only vendor on IDC’s market share list to actually ship more severs in the first quarter 2019 compared to the same quarter one year ago.

Earlier this year, Inspur released new artificial intelligent focused servers for edge computing featuring new NVIDIA core GPUs, dubbed Inspur NE5250M5. The company said the new servers are ideal for the most compute-intensive AI applications, including Internet of Things and autonomous vehicles.

Lenovo

Q1 Market Share: 5.7%

Lenovo witnessed server sales growth of 4 percent in the first quarter 2019 by generating $1.13 billion in revenue, up from $1.09 billion during the same quarter one year ago. The Hong Kong-based company placed fourth in global server market share at 5.7 percent, which was flat year over year.

In terms of server units shipped, Lenovo placed fifth overall by shipping a total of 135,800 servers in the quarter, down 15 percent from the 160,700 servers it sold during the same quarter one year ago. Lenovo’s server unit shipment share dropped from 5.9 percent to 5.3 percent year over year, currently tailing Dell Technologies, HPE, Inspur and Supermicro.

Lenovo recently reported fiscal year revenue reaching an all-time high of $51 billion, up 12.5 percent year on year. For its fiscal year 2019 Lenovo’s Data Center Group sales – which includes servers – soared 37 percent year on year to more than $6 billion. The company is also planning to make every single asset in Lenovo’s data center portfolio become available to sell as a service.

Cisco

Q1 Market Share: 5.3%

The $50 billion longtime networking leader placed fifth in the global server market by capturing just over $1 billion in server sales during the first quarter, up 7 percent year over year. Cisco’s server market share slightly increased from 5.2 percent in first quarter 2018 to 5.3 percent.

San Jose, Calif.-based Cisco did not place in the top six vendor list in terms of total servers shipped, meaning the company shipped less than 125,000 servers during the quarter, according to IDC. Other than the four market share leaders on IDC’s list, Huawei and Supermicro shipped more servers than Cisco during the first quarter 2019.

Cisco recently reported third fiscal quarter revenues of $12.96 billion, up 6 percent year over year. The company’s Infrastructure Platforms segment, which includes products like servers, switching and wireless, rose 5 percent year over year to $7.55 billion. Last year, Cisco introduced a new AI, machine learning-specific line of UCS servers: the C480ML.

ODMs

Q1 Market Share: 23%

Global server revenue for the original design manufacturing (ODMs) group of vendors hit $4.5 billion in the first quarter 2019, down 1 percent from the $4.6 billion the group generated during the same quarter one year ago. The relatively flat sales quarter made market share for ODMs drop from 24.2 percent to 23 percent year over year.

“Demand from both enterprise buyers and hyperscale companies purchasing through ODMs was less voracious than in previous quarters; coupled with a difficult compare period from a year ago, this impacted the pace of market growth during the first quarter," said Lagana. "This was most evident in declining unit shipments during the quarter.”

The group of original design manufactures shipped a total of 651,400 server units in the first quarter, down 5.7 percent year over year. ODMs shipped approximately 40,000 less servers in first quarter 2019 compared to the same quarter one year ago.