Dell Reclaims Server Market Revenue Leadership Over HPE

With the worldwide server market climbing to $22.6 billion in third-quarter 2020, Dell Technologies and HPE continue to battle for market leadership as China-based vendors gain share.

IDC: Worldwide Server Market Hits $22.6 Billion In Third Quarter

Dell Technologies reclaimed global server revenue leadership over Hewlett Packard Enterprise in the third quarter of 2020 as the two continue their battle for server market-share supremacy, according to new server market data from IDC.

The worldwide server market generated $22.6 billion in the third quarter, representing 2.2 percent growth year over year. In total, vendors shipped approximately 3.07 million server units in the quarter, representing flat growth year over year.

“Global demand for enterprise servers was a bit muted during the third quarter of 2020, although we did see areas of strong demand,” said Paul Maguranis, senior research analyst for Infrastructure Platforms and Technologies at IDC, in a statement.

Volume server revenue was up 6 percent to $19 billion year over year, while midrange server revenue declined 14 percent to $2.6 billion, according to IDC. High-end servers declined by nearly 13 percent year over year to $937 million.

It is key to note that IDC declares a statistical tie in the server market when there is a difference of 1 percent or less in the share of revenue among two or more vendors. In this particular quarter, IDC declared a statistical tie between Dell and HPE.

CRN breaks down the top five server market-share leaders in the third quarter of 2020, many of which made CRN’s 10 Hottest New Enterprise Servers of 2020 list.

Biggest Market Trend In Q3: China Growth

One of the largest data points in terms of the global server market in the third quarter was the massive sales growth in China.

The fastest-growing geography in the world for servers was China, where server revenue within China grew 14.2 percent year over year. Comparably, server sales in the United States only grew 1.5 percent in the third quarter compared with last year. The entire region of Europe, the Middle East and Africa (EMEA) reported server sales declines of 5 percent year over year.

When looking at the top five server vendors in the world, three China-based vendors increased server sales year over year, while two U.S.-based vendors reported a drop in server revenue.

Fifth Place: Huawei

Q3 Market Share: 4.87%

Server Units Shipped: 177,729

The $123 billion Chinese technology conglomerate had a strong third quarter with sales climbing 20 percent year over year to $1.01 billion. The boost in sales rose Huawei’s worldwide market share from 4.15 percent in third-quarter 2019 to 4.87 percent. It is key to note that Huawei focuses primarily on serving China.

Huawei shipped a total of 177,729 server units in the third quarter, up 14 percent year over year compared with 156,150 servers sold in third-quarter 2019. Approximately 6 percent of all servers shipped globally in the third quarter came from Huawei.

Fourth Place: Lenovo

Q3 Market Share: 5.88%

Server Units Shipped: 163,908

The worldwide leader in PCs and growing data center infrastructure standout generated $1.33 billion in server sales during the third quarter, up more than 11 percent year over year. Lenovo’s Data Center Group captured 5.88 percent share of the global market, up from 5.39 percent share in third-quarter 2019.

Although Lenovo was one of the only vendors to report double-digit server sales growth, the Hong-Kong-based company shipped roughly 40,000 fewer servers compared with third-quarter 2019. Lenovo shipped a total of 163,908 servers in third-quarter 2020, down 20 percent compared with 204,040 servers in third-quarter 2019. Roughly 5 percent of all servers shipped globally in the third quarter were from Lenovo.

Third Place: Inspur/Inspur Power Systems

Q3 Market Share: 9.37%

Server Units Shipped: 296,121

Inspur has become a rising force to be reckoned with in the global server market with strong server sales growth over the past several quarters. The China-based company generated $2.11 billion in global server revenue, up 7.2 percent year over year. Due to the existing joint venture between IBM and Inspur, IDC combines the global market share for both Inspur and Inspur Power Systems.

In third-quarter 2020, Inspur shipped a total of 296,121 server units across the globe, down 6 percent year over year compared with nearly 315,000 shipped in third-quarter 2019. Roughly 10 percent of all servers shipped globally in the third quarter was from Inspur.

First Place (Tie): HPE/New H3C Group

Q3 Market Share: 15.94%

Server Units Shipped: 425,117

The $27 billion infrastructure behemoth generated a total of $3.6 billion in server sales in the third quarter, down 3.8 percent year over year. The fall in server revenue made HPE lose 1 point of market share year over year. HPE’s market share in third-quarter 2020 was 15.94 percent compared with 16.93 percent in third-quarter 2019.

The Houston-based company also witnessed a drop in global server shipments. HPE shipped a total of 425,117 servers during the third quarter, representing a 7.5 percent decrease compared with 459,395 servers shipped in third-quarter 2019. Approximately 14 percent of all servers shipped globally in the third quarter came from HPE.

Due to the joint venture between HPE and China-based New H3C Group, IDC combines the two companies in its market-share report as HPE/New H3C Group. HPE owns a 49 percent stake in New H3C while the Chinese company Unisplendour owns a 51 percent stake.

First Place (Tie): Dell Technologies

Q3 Market Share: 16.65%

Server Units Shipped: 502,409

The $92 billion infrastructure global market leader generated $3.76 billion in server sales in the quarter, representing a slight decline year over year compared with $3.78 billion generated in third-quarter 2019.

Dell Technologies reclaimed leadership in global server revenue in the third quarter by besting HPE by roughly $160 million in server sales. In the second quarter of 2020, HPE bested Dell in terms of server revenue by roughly $240 million.

Dell’s worldwide server market share in the third quarter was 16.65 percent, down from 17.12 percent share in third-quarter 2019.

Dell sold more servers globally than any other company in the third quarter with 502,409 servers shipped, representing flat growth year over year. Approximately 16 percent of all servers shipped globally in the third quarter was from Dell.

ODMs

Q3 Market Share: 28%

Server Units Shipped: 989,024

Original design manufacturers (ODMs) accounted for the largest market share for server revenue, although IDC combines all ODMs in terms of server revenue share and total shipments. ODMs design and manufacture servers that are later rebranded by other companies for sale.

This group of ODMs captured 28 percent share of the total server market in the third quarter, up from 26 percent in third-quarter 2019. The group of ODMs generated $6.3 billion in server revenue, an increase of 8 percent year over year compared with $5.8 billion in server sales in the third quarter of 2019.

When combining ODM server vendor shipments, the group shipped a total of 989,024 server units, up 10 percent year over year. Approximately one-third of all the servers shipped in the third quarter came via ODMs.