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Global server revenue hits record quarterly high as hyperscale demand for datacentre kit soars

Latest worldwide server market tracker from analyst house IDC suggests hyperscale demand for datacentre hardware has fuelled record quarterly revenue growth for the sector

The revenue generated by global server shipments hit a record quarterly high during the third quarter of 2018, as the demand for datacentre kit from the cloud giants continues to soar.

According to IDC’s Worldwide Quarterly Server Tracker, server shipment revenue hit $23.4bn during the third quarter, which is the highest quarterly total on record.

Revenue was up 37.7% year-on-year overall, marking the third quarter out as the fifth consecutive quarter of double-digit growth the worldwide server market has enjoyed in recent times. Meanwhile, shipment volumes were up 18.3% on the previous year and totalled 3.2 million units.

Sebastian Lagana, research manager of infrastructure platforms and technologies at IDC, said the figures are indicative of how high the demand is for datacentre hardware from the cloud and internet giants at present.

“The worldwide server market once again generated strong revenue and unit shipment growth due to an ongoing enterprise refresh cycle and continued demand from cloud service providers,” said Lagana.

“Enterprise infrastructure requirements from resource intensive next-generation applications support increasingly rich configurations, ensuring average selling prices [ASPs] remain elevated against the year-ago quarter. At the same time, hyperscalers continue to upgrade and expand their datacentre capabilities.”

The market’s record quarter appears to have been primarily driven by the growth in volume server shipments, as the revenue generated by this category of hardware was up 40.2% on the previous year and hit $20bn.

IDC has directly attributed the surge in demand for volume units to the datacentre refresh and build-out activities of the hyperscale cloud and internet service provider community in previous quarters.

The main beneficiaries of this trend tend to be the original design manufacturers (ODM), who saw their share of the server market creep up by 2.5% to 26.8% from third quarter 2017. This group of suppliers also grew their collectively revenue by 51.9% during the past 12 months.

While the ODM community collectively holds the biggest share of the server market, Dell is name-checked by IDC as the server market leader with 17.5% revenue share, and quarterly revenue of $4.09bn, which is up 33.3% on the previous year.

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