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Dell EMC closes in on HPE’s server lead as cloud cuts spending

Dell EMC closes in on HPE’s server lead as cloud cuts spending

Global shipments decline but APAC bucks the trend

Traditional servers are still selling - although not as much as they once did - and Hewlett Packard Enterprise (HPE) is still king, but Dell EMC is nipping at its heels.

According to Gartner findings, during the first quarter of 2017, worldwide server revenue declined 4.5 per cent year over year, while shipments fell 4.2 per cent from the first quarter of 2016.

"The first quarter of 2017 showed declines on a global level with a slight variation in results by region," Gartner research vice president Jeffrey Hewitt said. "Asia Pacific [APAC] bucked the trend and posted growth while all other regions fell.

"Although purchases in the hyperscale data centre segment have been increasing, the enterprise and SMB segments remain constrained as end users in these segments accommodate their increased application requirements through virtualisation and consider cloud alternatives.”

The slight uptick in APAC figures could be a reflection of the region’s preference for hybrid cloud and virtualisation.

Hewlett Packard Enterprise (HPE) is still on top of the server market based on revenue, posting more than $3 billion in revenue for a total share of 24.1 per cent for the first quarter of 2017.

Dell EMC maintained the number two spot, with 19 per cent market share. The company was the only vendor in the top five to experience growth in the first quarter of 2017, according to Gartner.

Dell EMC’s second spot was secured by the company coming in on top of its rivals in server shipments for the first quarter of the year. The company had a 17.9 per cent market share which contributed to a slight increase of 0.5 per cent growth over the first quarter of 2016.

Despite a decline of 16.7 per cent, HPE secured the second spot with 16.8 per cent of the market.

Analysts flagged some “hurdles” for Dell Technologies, as the company reported a US$1.5 billion operating loss in its first 2017 quarter.

Technology Business Research analyst Stephanie Long said the company’s latest financials indicate that, despite Sweet’s claims, the company still has some hurdles to overcome.

“Dell Technologies’ portfolio has undergone substantial changes in 2017," Long said.

"A series of product announcements in May benefit the majority of its business units and bring the promise of revenue gains that will, to a degree, mitigate some industry-wide challenges, such as rising components costs during 2H17.

“However, TBR believes Dell Technologies’ near-term strategy to address these market dynamics is unclear at this time, as the vendor searches for a balance between restructuring internally to minimise price increases while balancing raising prices with market share to maintain its growing customer base and profitability.”


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