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By | Paul Kunert 2nd June 2014 14:58

Do NOT adjust your set, viewers: UK server sales are GROWING

Big iron drags sector into the black, x86 helps out too

There was some welcome respite for hard pressed server box pedlars during Q1 as private and public sector organisations queued up to spend again, bringing to a close several quarters of declining market revenues.

The latest numbers from IDC show the UK generated server sales of $420m (£250.7m) in the first quarter of 2014, up eight per cent year-on-year, with x86 rising four per cent to $357m (£213.1m). Non-x86 sales were up 40 per cent to $63m (£37.6m).

Of course, this expansion looks artificially high as it comes against a very weak comparison quarter a year ago when revenues had crashed 26 per cent to $390m, pointed out Giorgio Nebuloni, research manager at IDC.

"The market is relatively healthy," he told The Channel, "GDP stability has led to an increase in spending but it remains to be seen if this is a long term trend. We are working on forecasts."

He said public sector server investment was up eight per cent compared to Q1 2013, while SMEs' spending jumped seven per cent and the large/very large corporate sector (500 seats and above) edged up 1.5 per cent.

Market kingpin HP reported a two per cent revenue fall to $172.2m largely down to fewer x86 shipments, while its legacy big iron biz came in flat. Dell grew 2.5 per cent to $84m though this was purely based on Intel-based systems.

The x86 division continued to slide at IBM - there's a reason why it is selling up - down 25 per cent year-on-year but Big Blue grew revenues seven per cent overall on the back of some meaty System z deals to $63m (£37.6m).

The flourishing blade business at Cisco helped the Chambers' clique to report growth of 60 per cent to $33.6m (£20m), around half of which is transacted directly to customers, according to Nebuloni.

He said the networking giant is building stronger ties to distributors and this will likely mean that proportionally more sales with flow through the channel the addressable market continues to swell.

The fifth and final top five vendor is Oracle, which has declined in nearly every quarter since it acquired Sun Microsystems. Server revenues were up 15 per cent in the quarter to $27.3m (£16.3m) as more customers bought into the engineered systems Oracle punts.

The rest of the market was made up by “others” including Fujitsu et al and the Taiwanese ODMs.

Nebuloni said it is currently modelling sales forecast for 2014 but reckons the UK is expected to be flat with 2013.

"It is clear the market economics are improving but it is not clear what the impact of virtualisation and cloud will be, we are evaluating that," he said. ®

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