Refreshes and cloud spending boost server demand

The latest analysis of the worldwide server market from IDC shows continuing growth in the hardware segment

A combination of customers refreshing raging hardware and the continuing need it invest in cloud infrastructure helped global server sales improve in the third quarter.

The latest numbers from IDC indicate that year-on-year there was an increase of 4.8% in server growth in Q3, which came on the back of a 2.5% improvement in the second quarter.

The improving fortunes in the server world should also continue into next year as market conditions provide more incentives for customers to upgrade and invest in new technology.

The last quarter saw the benefits of an ongoing refresh cycle and customers are also spending on servers to gain extra data centre capacity with both the volume and mid-range systems experiencing growth of 8.8% and 18.4% respectively year-on-year.

At the high-end of the server market there were declines of 23.2% but IDC blamed problems with product cyclicality issues as one of the main reasons for the fall.

"The server market continues to be deeply impacted by the shift to the 3rd Platform and the affect of mobile, cloud, social and big data analytic technologies. IDC has seen increasing market influence from Greater China, hyperscale datacenters, ODMs and native Chinese OEMs, all of which grew sharply in the third quarter," said Matt Eastwood, group vice president and general manager, enterprise platforms at IDC.

"We also saw the continuation of a cyclical enterprise refresh cycle, which IDC expects will continue well into 2015. This refresh will be further accelerated by Microsoft's announcement that it is ending support for Windows Server 2003, coupled with Intel's recent release of its Grantley Xeon EP,” he said.

The top two players in the market, HP and IBM, both saw their market share slip with Dell gaining ground in third place and Cisco leap frogging Oracle into fourth slot.

IBM’s position in second place came ahead of its move to divest its x86 operations to Lenovo and there should be some impact on its position going forward.

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