FRAMINGHAM, Mass. — (BUSINESS WIRE) — May 30, 2018 — According to the International Data Corporation ( IDC) Worldwide Quarterly Server Tracker, vendor revenue in the worldwide server market increased 38.6%, year over year to $18.8 billion during the first quarter of 2018 (1Q18). Worldwide server shipments increased 20.7% year over year to 2.7 million units in 1Q18.

The overall server market continued to strengthen with its third consecutive quarter of double-digit growth, generating more revenue than any other first quarter on record. This historic demand for servers is driven by a market-wide enterprise refresh cycle, strong demand from cloud service providers, increased use of servers as the core building blocks for software-defined infrastructure, broad demand for newer CPUs such as Intel's Purely platform, and growing deployments of next generation workloads. Average selling prices (ASPs) increased during the quarter due to richer configurations and increased component costs. The increased ASPs also contributed to revenue growth.

Volume server revenue increased by 40.9% to $15.9 billion, while midrange server revenue grew 34% to $1.7 billion. High-end systems grew 20.1% to $1.2 billion.

"Hyperscale growth continued to drive server volume demand in the first quarter," said Sanjay Medvitz, senior research analyst, Servers and Storage at IDC. "While various OEMs are finding success in this space, ODMs remain the primary beneficiary from the quickly growing hyperscale server demand, now accounting for roughly a quarter of overall server market revenue and shipments."

Overall Server Market Standings, by Company

Dell Inc. and HPE/New H3C Group were statistically tied* for first in the worldwide server market with 19.1%, and 18.6% market shares respectively in 1Q18. Dell was the fastest growing server vendor among the top 5 companies, growing revenue 50.6% year over year to $3.6 billion and gaining 1.5 points of revenue share year over year on a strong performance in all major geographic regions. HPE/New H3C Group revenue increased 22.6% year over year in 1Q18 to $3.5 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. Lenovo, IBM, and Cisco were all statistically tied* for third position in the market with respective shares of 5.8%, 5.3%, and 5.2%. The ODM Direct group of vendors grew revenue by 57.1% (year over year) to $4.6 billion. Dell Inc. led the worldwide server market in terms of unit shipments, accounting for 20.6% of all units shipped during the quarter.