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EMEA Server Shipments and Revenue Start Recovery After 11 Brutal Quarters: Gartner

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Server shipments and revenues in the EMEA market both grew in Q2 2014 for the first time in years, led by HP, according to Gartner’s latest server market statistics, which were released Wednesday.  Shipments increased by a modest 0.8 percent, but had been down for 11 consecutive quarters.

Server revenues had fallen for 10 quarters in a row, but surged to $3.2 billion, a 3.8 percent year-over-year increase.

“The second quarter of 2014 marks a key milestone in the server market for many vendors, as both shipments and revenue grew for the first time since this period in 2011,” Errol Rasit, research director at Gartner said. “Despite the steady improvement in the server market, these positive results highlight the end of a slump, rather than a return to growth. Server providers must continue to ensure that a focus on growth remains a top priority.”

HP server revenue grew by an estimated 7.3 percent from a year ago, though its market share of shipments decreased by over 5 percent. IBM’s market share increased by 5.5 percent, but its revenue was down by $124 million, or almost 15 percent.

Eastern Europe was the only region in the EMEA market with decreases in shipments and revenues, while both shipments and revenues grew the most in the Middle East and Africa.

Results also varied greatly by server type, with x86 server revenue growing by 12.7 percent, while RISC and Itanium UNIX revenues declined 23.6 percent.

“Despite top line positivity, mixed vendor and regional results during the second quarter highlight the ongoing challenges the server market faces in EMEA,” said Mr. Rasit. “Underlying demand is increasingly positive, but server customers are increasingly discerning regarding technology choice and cost. These two opposing factors could limit server market growth in 2014, although we expect continued improvement in the second half of the year.”

Gartner noted growth in IT infrastructure spending in the Middle East and Africa in March, around the same time that IDC noted improvement in the market.

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