FRAMINGHAM, Mass. — (BUSINESS WIRE) — September 12, 2017 — According to the International Data Corporation ( IDC) Worldwide Quarterly Server Tracker, vendor revenue in the worldwide server market increased 6.3% year over year to $15.7 billion in the second quarter of 2017 (2Q17). Overall server market growth rebounded after several slow quarters as much of the market had been waiting for availability of Intel's new Skylake processors. While demand from cloud service providers propped up overall market performance, many other areas of the server market are still stagnant. Worldwide server shipments increased 1.9% year over year to 2.45 million units in 2Q17.

Volume server revenue increased by 8.3% to $12.9 billion, while midrange server revenue grew 19.6% to $1.5 billion. Demand for high-end systems experienced a year-over-year revenue decline of 18.9% to $1.3 billion. IDC expects continued long-term secular declines in high-end system revenue.

"Hyperscalers as a group made a large deployment push in the second quarter led by Amazon, which alone accounted for more than 10% of server units shipped in the quarter," said Kuba Stolarski, research director, Computing Platforms at IDC. "As hyperscalers tend to lead the market on most architectural updates, we expect the rest of the market to catch up over the next several quarters. As the market cycles through this refresh, we are seeing changes in vendor portfolios with new modular system designs and a greater focus on accelerator technologies, as well as the continued evolution of the role of cloud services in corporate IT."

Overall Server Market Standings, by Company
HPE/New H3C Group remained first in the worldwide server market with 21.3% market share in 2Q17, as revenue decreased 8.4% year over year to $3.3 billion. HPE's share and year-over-year growth rate includes revenues from the H3C joint venture in China that began in May of 2016; thus, the reported HPE/New H3C Group combines server revenue for both companies globally. Dell Inc maintained the second position in the worldwide server market with 17.7% of vendor revenue for the quarter and 7.0% year-over-year growth to $2.8 billion. IBM and Cisco were statistically tied for the third market position. IBM had 6.6% share, with revenue declining 20.8% year over year to $1.0 billion. Cisco had 5.6% share, with revenue increasing 1.7% to $875 million. Lenovo was ranked fifth with 5.3% share and revenue declining 13.9% to $834 million. The ODM Direct group of vendors grew revenue by 48.1% to $3.5 billion.