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Report: Enterprise server demand underwhelming for 4Q17

Enterprise server demand remained soft in 4Q17, according to a recently published report from Dell’Oro Group.

High memory costs contributed to a slower than expected Purley refresh cycle, resulting in the decline in the Enterprise market.

“Server average selling prices are now at an all-time high, which we believe contributed to the softening of Enterprise demand,” says Dell’Oro Group senior analyst Baron Fung.

“Persistent high memory costs have caused server vendors to pass on the cost increases to end-users in the form of higher system prices. Also, the Purley refresh cycle ramp has been slower as end-users wait for pricing to stabilise. Based on the updated consensus that the memory costs will ease in 2018, we expect Enterprises to resume spending on servers and carry on with the Purley refresh.”

The report also revealed that Dell is now the original equipment manufacturer (OEM) server market leader, with HPE coming in second for both revenue and volume.  

The remaining OEM server vendors in 4Q17 by revenue were Hewlett Packard Enterprise, IBM, Huawei, and Lenovo.

Also, the momentum in the Cloud continues unabated, as Cloud service providers ended 2017 with an unprecedented expansion of new data centres.

In 4Q17, server shipments to the top four Cloud providers (Google, Amazon, Microsoft, Facebook) grew 19% year-over-year.

Server shipments to the rest of the Cloud grew 29% year-over-year.

Dell’Oro Group’s Server Quarterly Report provides complete, in-depth coverage of the market with tables covering manufacturers’ revenue, unit, and port shipments for blade, high-density and stand-alone servers.

Network attach rates, virtualisation attach rates and VM density, common equipment overlap between storage, servers and switching, and white box versus traditional enterprise server shipments are included.

Dell’Oro Group is a market research firm that specialises in strategic competitive analysis in the telecommunications, networks, and data centre IT markets.  

It provides quantitative data and qualitative analysis to facilitate critical, fact-based business decisions.

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