The overall branded server market may be in continual decline, but there is one area that is flowering - the Original Design Manufacturers building systems directly for cloudy giants such as Amazon and Facebook.
For the first time IDC has broken out the numbers for an ODM Direct segment, which includes Quanta Computer, Wistron/Wiwynn, Inventec Corporation, Compal Electronics, due its size and growing importance.
Cloudy service providers are bypassing the big branded players to place orders for complete- and partial sub-systems where final assembly is frequently done by channel folk, mainly large integrators.
The ODM Direct segment is still dwarfed by individuals sales from HP, IBM and Dell – this is likely to change in years to come. IDC reported 45.2 per cent year-on-year rise to $783m as white box shipments went up 30.7 per cent to 326k units.
This accounted for 6.5 per cent of server revenue and 14.4 per cent of market shipments. Nearly 80 per cent of this was generated in the US "primarily through sales to Google, Amazon, Facebook and Rackspace," said IDC.
Contrast this to the total market and the numbers make for a depressing read, if you are part of the old world that is: Global server sales fell 3.7 per cent in value to $12.1bn, the third consecutive quarterly dip, and shipments came in flat on the same period a year ago at 2.3 million units.
All regions dipped said IDC, as demand for mid- and high-range systems crashed by 17.8 per and 22.5 per cent respectively, with solid demand for x86, up 2.8 per cent to $9.5bn (units flat at 2.2m) more than offset by the drop off in Unix demand.
Matt Eastwood, group veep for Enterprise Platforms, said:
"The market was impact by a steady transition from 2nd and 3rd platform workload demand coupled with particularly weak sales of Unix servers, which served to further dampen the market."
Eastwood said second-platform workloads represent a "healthy consolidation" play that may push demand for consolidated systems, and third-platform apps are driving server demand into cloud service providers.
"This is opening up demand for both ODMs and Chinese OEMs," he said.
HP regained the market lead from IBM due to returning demand for ProLiant, with revenues climbing 1.5 per cent to $3.39bn handing it 28.1 per cent market share.
IBM turnover dropped 19.4 per cent to $2.82bn handing it a 23.4 per cent share of the spoils.
Dell came third, declining six per cent to $1.96bn and holding a 16.2 per cent share, Cisco continued its rise in the server stakes, up nearly 43 per cent to $599m to take 5 per cent share, tied with Oracle, which saw factory revenues fall 16 per cent to $494m.
The impact of the cloud giants on traditional vendors was expected in years gone by, and now it is there for all to see. ®