Did IBM Benefit from Growth in the Server Market?
By Anne ShieldsMay. 2 2018, Published 10:25 a.m. ET
Server market grew ~26% to $20.7 billion in 4Q17
Earlier, we discussed that IBM’s (IBM) mainframe refresh had benefited the company’s Systems segment. IBM’s Systems segment depends on the server market for growth.
According to IDC (International Data Corporation), 2017 ended on a positive note for the global server market. Global server revenue rose 26.4% YoY (year-over-year) to $20.7 billion. Server shipments rose 10.8% to 2.8 million units. Thus, server revenue rose faster than shipments.
IBM’s 4Q17 revenue also beat its 3Q17 revenue when global server revenues surged 19.9% on a YoY basis to $17.0 billion.
IBM’s z14 launch fueled growth in high-end systems area
According to IDC, high-end server revenue, which includes mainframes, rose 41.1% to $2.9 billion in 1Q18. IBM’s z14 launch in 3Q17 drove growth in the segment. IDC expects its high-end system revenue to fall with the exception of significant or major platform refreshes such as IBM’s mainframe. Midrange server revenue rose 48.5% to $1.9 billion, and volume server revenue rose 21.9% to $15.8 billion.
As the above presentation shows, Hewlett Packard Enterprise (HP), Dell, IBM, Lenovo (LNVGY), and Cisco (CSCO) were the top five companies in that order based on their 4Q17 revenues from the server business.
Technology players’ total revenue in the server market rose 26.4% to $20.7 billion in 4Q17.
