Server Market Down for the First Time in 15 Quarters

Dec. 6, 2016
Possibly reflecting the growth of SDN, NFV and cloud technologies, a report from Dell'Oro Group indicates that the server market recorded its ...

Possibly reflecting the growth of SDN, NFV and cloud technologies, a report from Dell'Oro Group indicates that the server market recorded its first year-year-over decline in 15 quarters. White box vendor shipments were up year-over-year while Hewlett-Packard Enterprise and Dell Technologies were hit by enterprise weakness.

"Despite continuing strength in cloud data center buildouts during the quarter, growth wasn't able to offset a pronounced weakness in the enterprise server demand," said Sameh Boujelbene, director at Dell'Oro Group. "Server shipments to enterprise data centers posted the steepest year-over-year decline since they started underperforming early this year. While this was a surprise to many component - as well as system - vendors in the data center market, the weak performance in the enterprise market was in line with our expectations, as we've been predicting enterprise server shipments peaked in 2015."

Except Cisco Systems, all of the major U.S.-based branded vendors took a hit in their performance during the quarter, while white box server vendors continue to gain share and posted another record level of shipments and revenue.

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