According to the latest EMEA Server Tracker from International Data Corporation (IDC), factory revenue in the EMEA server market reached $3.7 billion in the fourth quarter of 2013 (4Q13), a decrease of 5.2% when compared with the same quarter of 2012.
Shipments reached 606,548 units, representing a minimal 0.3% annual decline. The quarter-on-quarter performance displayed a more positive picture with moderate double-digit growth in volumes, which were up 13.2% and revenue showing strong growth of 28.5%.
EMEA server revenues reached $12.4 billion for the full calendar year 2013, which shows a moderate annual decline of 5.3%. The decline in unit terms was less significant at 2.7%, with over 2.2 million server units shipped in 2013. Despite the negative growth the market has improved compared with the stronger annual declines of 9.6% in revenues and 5.0% in units in 2012.
x86 servers totaled revenues of $2.8 billion, equivalent to 75.8% of the total value market (a decline of 5.7 percentage points quarterly and an increase of 6.6 percentage points annually). x86 industry standard servers achieved year-on-year revenue growth of 3.7% despite a slight decline in unit terms by 0.3%.
“These figures underline the ongoing shift toward higher-end servers with upgrades to models that feature the latest-generation x86 processors,” said Giorgio Nebuloni, research manager, Enterprise Server Group, IDC EMEA.
Non-x86 sales only accounted for 6,250 units, with revenues of $888 million, which is a decline of 25.4% year-on-year — a slight increase on the drop of 22.2% experienced in the previous quarter, which also showed moderate revenue growth on the CISC side. In 4Q13, all non-x86 categories experienced double-digit declines, with a sharp 33.9% drop in CISC revenue.
Although CISC systems are mainly used for specific use cases and tend to be less exposed to migrations to x86 than RISC, it is not surprising to see a decline following the strong third quarter in view of customers’ refresh cycles. IDC believes that non-x86 technologies will continue to be eroded by migration to x86, though such migrations can be disruptive and risky for CIOs who also have several other priorities such as mobility and Big Data. Complex migration projects are usually moving very slowly and take several quarters of planning.
Western European Highlights
The Western European market continued to reflect the general trend toward x86 servers, which generated sales of $2.1 billion and showed moderate annual growth of 5.7%. Non-x86 server revenue totaled $710 million, a decline of 22.8%. Despite the encouraging performance on the x86 side, the overall Western European server market shrank 3.5% in 4Q13 compared with the same quarter in 2012.
CEMA Highlights
Central and Eastern Europe, the Middle East, and Africa (CEMA) server revenue decreased 10.3% year-on-year in the fourth quarter of 2013, posting $892.31 million. It was the sixth consecutive quarter of decline. Demand for both x86 and non-x86 was subdued due to economic weakness across the region with non-x86 servers declining as much as 34.1% year-on-year.
“The Central and Eastern Europe (CEE) subregion was down 13.3% to $494.24 million,” said Jiri Helebrand, research manager, IDC CEMA. “Deferred demand due to upcoming refresh cycles and a lack of major deals in Russia and the CzechRepublic added to weak year-end performances. Server sales in Poland were a bright spot thanks to investments in the government sector and demand from service provider companies.
The Middle East and Africa (MEA) subregion declined 6.2% year-on-year to $398.07 million, impacted by weak performance in Saudi Arabia and Turkey. In contrast, African countries such as South Africa, Nigeria, and Kenya all recorded growing server revenue driven by the financial and telecommunications sectors.”
Market Highlights
- The strong decline in non-x86 revenues (-25.4% YoY) is mainly down to the continuous migration to x86 that has been evident mainly from 2H11 onwards. There is no sign of a recovery in this category, and the decline has been slightly slower in the full calendar year 2013 than in 2012 because many clients who want to migrate have already done so.
- By operating system, Windows held 51.6 % of the market, generating hardware spending of around $1.9 billion, down 0.6% year-on-year. Linux achieved a significant rise year-on-year, growing by 9.3% after generating sales of $832.8 million, and capturing less than a quarter (22.7%) of the total market. In contrast, Unix revenues declined 15.4% year-on-year, reaching sales of only $462.6 million on the back of weaker RISC system sales and lack of demand from new customers. z/OS revenues dropped sharply by 40.5% year-on-year to $290.0 million due to refresh cycles.
- The market share of volume servers has declined moderately to 69.1% of total revenues, compared with the previous quarter (75.6%). Volume servers generated revenues of $2.5 billion and were the only category that achieved positive year-on-year revenue growth (3.7%).
Top 5 Corporate Family, EMEA Server Factory Revenue ($M), Full Calendar Year 2013
| Vendor | 2012 Server Revenue | 2012 Market Share | 2013 Server Revenue | 2013 Market Share | 2013/2012 Revenue Growth |
| HP | 4,733.711 | 36.1% | 4,399.107 | 35.5% | -7.1% |
| IBM | 3,793.392 | 28.9% | 3,097.202 | 25.0% | -18.4% |
| Dell | 1,775.486 | 13.5% | 1,834.179 | 14.8% | 3.3% |
| Fujitsu | 696.691 | 5.3% | 687.410 | 5.5% | -1.3% |
| Oracle | 758.567 | 5.8% | 674.755 | 5.4% | -11.0% |
| Others | 1,349.959 | 10.3% | 1,714.400 | 13.8% | 27.0% |
| Total | 13,107.806 | 100.0% | 12,407.052 | 100.0% | -5.3% |
