EMEA Server Revenues Reach $12.4B in 2013: IDC Report

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EMEA server revenues reached $12.4 billion in 2013, with more than 2.2 million server units shipped last year, according to the latest EMEA Server Tracker from International Data Corporation, released on Tuesday.

According to the data, EMEA server revenues for 2013 showed an annual decline of 5.3 percent, though the decline in unit terms was less significant at 2.7 percent. Despite negative growth, IDC says that the market has improved compared to the stronger annual declines of 9.6 percent in revenues and 5 percent in units in 2012.

In the fourth quarter of 2013, factory revenue in the EMEA server market reached $3.7 billion, down 5.2 percent over Q4 2012. In Q4 2013, there were 606,548 units shipped, representing a slight annual decline of 0.3 percent.

Compared to Q3 2013, server volumes were up 13.2 percent and revenue up 28.5 percent in Q4 2014. According to IDC, the strong performance over the previous quarter can mainly be traced back to seasonality and a “sign of continuing price sensitivity at times of economic uncertainty and ongoing price competition, particularly at the lower end of the market.”

Despite EMEA being behind other regions in terms of infrastructure spend, EMEA spending on storage, server, and enterprise networking equipment will hit $3.47 billion in 2014, according to a separate report released last week by Gartner.

According to IDC, x86 servers totaled revenues of $2.8 billion in 2013, achieving year-on-year revenue growth of 3.7 percent despite a slight decline in unit terms by 0.3 percent.

“These figures underline the ongoing shift toward higher-end servers with upgrades to models that feature the latest-generation x86 processors,” Giorgio Nebuloni, research manager, Enterprise Server Group, IDC EMEA said. “Capacity increases are also achieved through advances on the virtualization and management software side, making scale out less viable for on-premises data centers in view of the high costs for energy, maintenance, and floor space rental. The trend is of course reversed in large B2C and B2B cloud facilities, which keep pushing the envelope on scale-out, commodity architectures.”

In terms of operating system, Windows held the majority of the market, accounting for 51.6 percent, and generating hardware spending of around $1.9 billion, down 0.6 percent year-over-year. Linux grew 9.3 percent year-over-year, generating sales of $832.8 million and accounting for 22.7 percent of the total market.

In Western Europe, the overall server market declined 3.5 percent in Q4 2013 compared with the same quarter in 2012. Revenues for x86 servers hit $2.1 billion, while non-x86 server revenue totaled $710 million.

“Large data center build-outs by global cloud service providers and social networks accounted for a significant chunk of growth in Western Europe that is most notable in the Nordic region and leads to a greater rise in shipments than revenues due to large deals of commodity servers at low prices from Asian ODMs as well as major server vendors,”Andreas Olah, research analyst, Enterprise Server Group, IDC EMEA said. “However, several countries that saw larger shipments to mega-data center customers in the previous year experienced a decline this quarter including the Netherlands, Ireland, and Belgium.”

According to IDC, in 2013 there was strong growth in Greece and Portugal, moderate rises in Germany, with declines in both the UK and Spain.

Central and Eastern Europe, the Middle East, and Africa server revenue decreased 10.3 percent year-over-year in Q3 2013 with $892.31 million, marking the sixth consecutive quarter of decline. The highlight for server sales in the region was Poland, crediting growth to investments in the government sector and demand from service providers.

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