Cloud Expansions Boosting Server Sales

This year server vendors saw the biggest growth in shipments in over 4 years so far. This is mainly due to the continued investments in the hyperscale server infrastructures that power all of the private and public cloud services. So this is a really big year for the industry, the best since the huge economic downturn a few years back. In the first quarter shipments grew by 13%, which is about 2.7 million units shipped out. Revenue grew by 18%, equaling a staggering $13.4 billion.

There is a really strong demand for the hyperscale area in the United States, which is driving the growth we are seeing. Hyperscale is a term that describes the systems that use thousands of servers to provide power to cloud and big data infrastructures. Every form factor is in more demand too, including rack-optimized, blade, density-optimized, and tower servers.

Hewlett-Packard was the number one vendor in revenue and in volume, closely followed by Dell in the number two spot. Hewlett-Packard rack-optimized servers are in very high demand at the moment. Even though their server business is pretty small compared to everything else they offer, they experience a huge amount of revenue growth compared to this time last year.

Oddly enough, even though there was so much growth in the server department, they weren't able to keep up with the competition. Overall, their revenue share dropped from 25.5% to 23.8% and it's marketing share by volume dropped 2.6% points down to 20%. Last week, Hewlett-Packard said that they are planning on splitting up into two separate companies later this year. One company would be selling enterprise equipment and services while the other company would be selling the standard PCs and printers.

Dell is kind of in the same boat. They had increased revenue and shipments but were not able to keep up with the rest of the market. Dell's share of revenue and shipments both slipped by just under 1 percentage point leaving them at 17.1% and 19%. They did, however, see revenue growth in rack-optimized products and density-optimized servers as well.

HP and Dell were at the top of the market when it came to revenue and shipments, but product mix made for some differences between the rest of the top five rankings by revenue and shipments. IBM was in third place for server revenue, followed by Lenovo and Cisco Systems. Lenovo was number three in server shipments ahead of Huawei Technologies and Inspur Electronics.

While HP and Dell led the market by both revenue and shipments, product mix led to some differences between the rest of the top five rankings by revenue and shipments. IBM had the third-largest server revenue, followed by Lenovo and Cisco Systems, while Lenovo was third by server shipments, ahead of Huawei Technologies and Inspur Electronics. Lenovo and IBM's numbers were also of course affected by Lenovo's acquisition of IBM's x86 server business.

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Cisco has a revenue growth of 44.4% from last year which is way above average. Their blade server business is also growing and getting more revenue from blade servers than every company on the list besides Hewlett-Packard.

It's good to see the server industry see growth. Cloud computing has driven business in other sectors of technology and the server industry was definitely in need of a pick-me-up.

Content originally published here