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Gartner Says EMEA Server Revenue Grew Despite Shipments Falling 4 Per Cent in the Third Quarter of 2014

(PresseBox) (Egham, UK, ) In Europe, the Middle East and Africa (EMEA), server shipments in the third quarter of 2014 declined 4 per cent, according to Gartner, Inc. Server revenue reached $2.9 billion, a 1.2 per cent year-over-year increase.

"The server shipment growth seen in the second quarter proved to be a short-lived phenomenon, and marginal revenue growth of 1.2 per cent in the third quarter of 2014 highlights the fragility of demand," said Errol Rasit, research director at Gartner. Server revenue grew for the third consecutive quarter after 10 consecutive quarters of revenue declines.

"Despite many positive growth expectations for the EMEA server market - such as an accelerated installed base refresh, cloud computing and digital business - many of these projects will bear fruit over many years, rather than providing a short-term uptick in demand. Today, these effects are not positive enough to radically outpace budgetary caution and server consolidation."

In the third quarter of 2014, HP extended its revenue share lead in EMEA with 6.4 per cent growth (see Table 1). The vendor posted a strong result despite a shipment decline of 8.2 per cent (see Table 2). HP's growth in the third quarter was fuelled by demand for blade and rack-optimised systems, the result of a fairly traditional demand profile throughout the quarter.

Dell moved to become the second-ranked vendor in terms of revenue and shipments, replacing IBM. Dell exhibited strong growth of 9 per cent in revenue and 3.4 per cent in shipments. This compares to double-digit declines for IBM's revenue and shipments. Dell exhibited a consistent improvement in sales as it improved channel coverage, product breadth and solution offerings. IBM is experiencing a period of major transition as it completes the divestment of its x86 business, its RISC business undergoes renovation in the face of declining UNIX demand, and its mainframe business hits a cyclical low point in anticipation of new product releases.

"Many IT organisations are struggling to prioritise server projects in the context of broader data centre modernisation initiatives, such as networking and storage optimisation," said Mr Rasit. "The challenge for the server providers will be to help organisations make the right spending decisions to support IT project success during 2015. This may limit server spending in the short term, but will pay off in the long term as server projects rise in importance once again."

From a regional perspective, only Western Europe recorded revenue growth (4 per cent) compared to revenue declines of 6 and 7 per cent in Eastern Europe and the Middle East and Africa, respectively. During the third quarter of 2014, x86 server revenue increased 6 per cent in EMEA. RISC/Itanium Unix revenue declined 13.2 per cent and the "Other CPU" segment’s revenue decreased by 39 per cent.

"Eastern Europe and the Middle East and Africa continued to exhibit weakness in demand. These regions still contain the promise of long term growth, but macro-economic and geopolitical challenges in key markets have muted short-term server investment," said Mr Rasit.

Additional information is available to subscribers of Gartner's programme of quarterly statistics for servers, worldwide. This programme provides worldwide market size and share data by vendor revenue and unit shipments. Segments include: region, vendor, brand, sub brand, CPU type, CPU family, Max sockets, platform, price band, operating systems and distribution channels.

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