Gartner Says Asia Pacific Server Shipments Grew 15.7 Percent in Fourth Quarter of 2011

KUALA LUMPUR, 2 March 2012 – Server shipments in Asia Pacific grew 15.7 percent year-on-year in the fourth quarter of 2011, while revenue increased 2.4 percent from the same quarter last year, according to Gartner, Inc.

“Asia Pacific was the fastest growing region for server shipments during the fourth quarter of 2011, with China as the main growth engine, supported by the continued momentum of data centre built out,” said Gartner principal analyst Erica Gadjuli. “Most major economies in Asia Pacific performed better than the rest of the world, which encouraged IT spending during 2011.”

During the fourth quarter, the x86 server market in Asia Pacific continued similar positive sales trends as observed in the previous quarter, despite some issues with hard-disk drive (HDD) inventory shortage because of the Thailand floods in October 2011. Revenue from x86 servers grew 18 percent year-on-year, and shipments were up 17 percent. The x86-based server sales represented 98 percent of total shipments in Q4 of 2011 whilst revenue share increased to account for 67 percent in this quarter, compared to 58 percent in Q4 2010 and 62 percent in the previous quarter. The strength of this segment was driven by enterprise buying preferences favouring richer configurations of rack optimised and blade servers.

Meanwhile the mainframe platform and RISC/ IA64 Unix servers saw revenues decline by 56 percent and 5 percent respectively, after positive performances in the previous three quarters of 2011. Furthermore, there was a global weakness in RISC/Itanium Unix servers shipments.

Country performance in Q4

Server shipments to China were up 27 percent from the fourth quarter of 2010 and revenue increased 17 percent year on year. For the same quarter, server shipped to Hong Kong increased 34 percent year-on-year, but revenue fell at 6 percent rate. On the other hand, the server market in Taiwan ended weaker than in Q4 2010, in both shipments and revenue, as they declined 14 percent and 5 percent respectively. Singapore, as one of the mature markets in this region, had server shipments decline 6 percent during the fourth quarter and revenue was also down 7 percent year on year. Consistent growth of x86 servers in Korea continued in this quarter and helped the overall server shipment volume to grow 16 percent but revenue declined 9 percent with the lack of contribution from other server platforms, namely mainframe, RISC, and Itanium based servers. In Malaysia, revenue from all server categories by CPU type except mainframe class servers declined year-on-year, which also led to a slowdown of 6 percent in overall revenue in Q4 2011 compared to Q4 2010. Shipment in Malaysia Q4 2011 grew 7.6% year-on-year. Lastly, server market performance in Australia was generally weaker across all server platforms, finishing at 10 percent lower year-on-year in shipments and 39 percent in revenue.

Vendor performance in Q4

“In this region, blade server revenue continued to grow the fastest compared to other form factors,” Ms. Gadjuli said. Blade servers (x86 and non x86) expanded in revenue by 15 percent year on year. HP continued to lead this market segment with 45 percent of total blade revenue in Q4 2011 and 32 percent share of shipments. However, Dell, in third place in the blade market, firmed up its share of both shipments and revenue, accounting for 11 percent and 9 percent respectively, up from 8 percent and 6 percent in Q4 2010. Cisco accelerated its penetration of the server market in Asia Pacific by pushing its USC blade product in 2011.

IBM continued its revenue leadership, accounting for 40 percent market share despite experiencing a decline of 3 percent year-on-year due to the lack of contribution from mainframe platform during Q4 2011. Compared with the same quarter of 2010, HP saw revenue decline 14 percent, mainly because of a slowdown in demand for its x86 servers, partly resulting from the HDD shortage issue, and Itanium based servers. On the other hand, server revenue from Dell grew reasonably strongly, up 28 percent year-on-year, fueled by significant take up in blade servers.

Table 1: Asia Pacific: Server Vendor Revenue Estimates, 4Q11 (U.S. Dollars Thousands)

	4Q11	4Q10	4Q11 Market Share (%)	4Q10 Market Share (%)	Year-Over-Year Growth (%)
IBM	1,060,123	1,092,884	40.3%	42.5%	-3.0%
HP	640,111	748,631	24.3%	29.1%	-14.5%
Dell	400,118	312,986	15.2%	12.2%	27.8%
Oracle	102,956	108,754	3.9%	4.2%	-5.3%
Lenovo	87,594	38,694	3.3%	1.5%	126.4%
Others	341,639	269,750	13.0%	10.5%	26.7%
All Servers	2,632,542	2,571,699	100.0%	100.0%	2.4%

Source: Gartner (February 2012)

Table 2 highlights the top five vendors’ server shipments in Asia Pacific. Dell climbed to first position with year-on-year growth of 30 percent. Shipments to Greater China, Korea and India, particularly of blade and rack optimised servers, accounted for Dell’s success in this quarter.

Table 2: Asia Pacific: Server Vendor Shipments Estimates, 4Q11 (Units)

	4Q11	4Q10	4Q11 Market Share (%)	4Q10 Market Share (%)	Year-Over-Year Growth (%)
Dell	135,831	104,137	23.9%	21.2%	30.4%
HP	132,314	141,644	23.3%	28.8%	-6.6%
IBM	117,723	97,262	20.7%	19.8%	21.0%
Lenovo	43,242	27,047	7.6%	5.5%	59.9%
Inspur Electronics	25,250	18,461	4.4%	3.8%	36.8%
Others	113,912	102,832	20.1%	20.9%	10.8%
All Servers	568,272	491,383	100.0%	100.0%	15.7%

Source: Gartner (February 2012)

Full Year 2011 Server Market Results

Tables 3 and 4 show that double digit growth of the server market in Asia Pacific continued in 2011, registering an increase of 21.3 percent in shipments and 17.7 percent in revenue from one year ago. The x86 servers remained as the catalyst for server growth as spending on this platform grew consistently since the first quarter of 2011. The majorityof the sales were motivated by data centre build out and increased configuration of virtual servers, not just in mature markets but also spreading into emerging markets. Virtualization drove demand for higher configurations in the rack optimised and blade segments.

IBM led the server market in revenue terms, maintaining its 40 percent market share in 2011 with the company successfully growing its revenue from Power System servers (RISC based) and System x (x86 based) in the double digits. Dell has steadily gained ground in both revenue and shipments for the past five years in Asia Pacific, thanks to the growing demand for the two and four socket blades and rack servers.

“For blade servers in particular, we saw mature markets such as Australia, Hong Kong, Korea and Singapore displayed much faster penetration one year ago,” said Ms. Gadjuli. “In 2011, the emerging markets like China and some countries in ASEAN sub region took part, especially in large enterprises, in contributing significantly to the blade revenue in Asia Pacific.” Overall, blade servers grew 17 percent in shipments and 30 percent in revenue.

Table 3: Asia Pacific: Server Vendor Revenue Estimates, 2011 (U.S. Thousand Dollars)

	YR 2011	YR 2010	2011 Market Share (%)	2010 Market Share (%)	Year-Over-Year Growth (%)
All Servers	10,026,328	8,518,053	100.0%	100.0%	17.7%
IBM	4,022,872	3,404,888	40.1%	40.0%	18.2%
HP	2,711,521	2,631,971	27.0%	30.9%	3.0%
Dell	1,430,705	1,061,866	14.3%	12.5%	34.7%
Oracle	514,498	484,534	5.1%	5.7%	6.2%
Lenovo	253,617	122,630	2.5%	1.4%	106.8%
Others	1,093,116	812,164	10.9%	9.5%	34.6%

Source: Gartner (February 2012)

Table 4: Asia Pacific: Server Vendor Shipments Estimates, 2011 (Units)

	YR 2011	YR 2010	2011 Market Share (%)	2010 Market Share (%)	Year-Over-Year Growth (%)
All Servers	2,095,218	1,727,141	100.0%	100.0%	21.3%
HP	549,275	511,845	26.2%	29.6%	7.3%
Dell	485,589	377,666	23.2%	21.9%	28.6%
IBM	428,308	347,072	20.4%	20.1%	23.4%
Lenovo	140,016	83,413	6.7%	4.8%	67.9%
Huawei Technologies Co., Ltd	86,821	76,208	4.1%	4.4%	13.9%
Others	405,209	330,937	19.3%	19.2%	22.4%

Source: Gartner (February 2012)

Additional information is available to subscribers of Gartner Dataquest’s Servers Quarterly Statistics Worldwide program. This program provides worldwide market size and share data by vendor revenue and unit shipments. Segments include: region, vendor, vendor brand, sub brand, CPU type, CPU group, Max CPU, platform, price band, operating systems and distribution channels.