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Signs Point to Continued Growth in Server Market

While computing devices continue their downward slide, the server market is showing sustained -- albeit single-digit -- growth, according to the latest quarterly reports from Gartner and IDC.

According to the two market research firms, revenues for servers increased by 7.2 percent (by Gartner's accounting) and 6.1 percent (by IDC's) in the second quarter of 2015. This marks the fifth consecutive quarter of year-over-year revenue growth, IDC said.

Of the roughly $13 billion spent on servers in the last three months, most of it was done by the key players: HP, Dell, IBM, Lenovo and Cisco.

While Gartner and IDC have somewhat different methodologies, both reported continued demand for servers.

"The recent growth trend in the server market is confirmation of the larger IT investment taking place, despite dramatic change occurring in system software thanks to open source projects such as Docker and OpenStack," said Al Gillen, IDC's program vice president of servers and systems software, in a statement. "While we do anticipate an impact on product mix and potentially on volumes, it is too early in the adoption cycle for these new software products to have a material impact on servers today. In the meantime, the market demonstrated healthy revenue and shipment growth this quarter."

Much of the growth is coming from demand for x86-based hyper-scale systems, as well as refreshes of servers among small and medium businesses, likely an outgrowth of Windows Server 2003's end of support. Microsoft issued its last patch for Windows Server 2003 in April.

Refreshes of IBM mainframes helped growth on the high end, though mid-range systems declined by 5.4 percent, according to IDC.

According to Gartner, in terms of shipments, HP remained the leader with 21.7 percent of the market and 2.5 percent growth, while No. 2 Dell captured 18 percent of the market but saw a slight decline of 0.4 percent.

Though a distant third, Lenovo -- which recently acquired IBM's x86 server business -- saw volume growth of 185.7 percent year over year. Both Gartner and IDC said Lenovo saw 500-plus percent revenue growth, although both increases were obviously aided by picking up IBM's commodity server line.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.