HP Leads Global Server Market As IBM Drops Out of Race

HP was on top of the worldwide server market based on revenue in the fourth quarter of 2014, despite only growing 1.5 percent since the previous year.

The firm, which plans to split into two businesses later this year, ended 2014 with $.n in revenue for its server business, a total share of 27.9 percent of the worldwide market.

IBM x86 server sale

IBM’s growth, however, plummeted 50.6 percent due to the sale of IBM’s x86 business to Lenovo in the fourth quarter of last year. This resulted in Lenovo experiencing a powerful growth of 43.4 percent, placing it at number four in the world rankings.

“There were several factors that produced the strong growth in the server market in 2014,” said Jeffrey Hewitt, research VP at Gartner.

“On a worldwide basis, hyperscale data centre deployments as well as service provider installations drove the x86-based server market upward. Organisations had less unit growth impact because of the ongoing presence of physical server consolidation through x86-server virtualisation. This overall market growth developed despite declines in both mainframe and Unix platforms.”

HP also held the trophy of shipping the most servers in Q4 2014, despite shipments declining 11 percent. Gartner said that HP’s revenue increase compared with its shipment decline suggests “a shift to sales of servers with richer configurations and relatively higher average selling prices to continue to support server consolidation through virtualisation”.

In the EMEA market, shipments in the fourth quarter of 2014 declined 0.7 per cent, while server revenue grew 1.2 per cent, totalling $3.6 billion. In 2014, server shipments declined 2.5 per cent and server revenue grew 2.1 per cent.

“Despite considerable market pressures, the fourth-quarter server results in EMEA were unremarkable,” said Errol Rasit, research director at Gartner. “The region saw growth prospects related to installed-base refresh, big data projects and cloud computing expansion; however, political and economic instability, combined with US dollar strength, dampened market demand in EMEA.”

HP: all for the taking?

Hewlett-Packard is also performing well in other areas. The company announced this week that it has spent $3bn (£1.95bn) on acquiring Aruba Networks, a maker of Wi-Fi equipment.

In one of HP’s biggest acquisitions since the Autonomy purchase in October 2011, the company will take on a firm with 1,800 employees that pulled in revenues of $729m in 2014.

The move went ahead for $24.67 per share in cash.  The equity value of the transaction is approximately £1.95bn ($3bn), and net of cash and debt approximately $2.7bn.

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