Server and storage sales plummet in 2020

Server and storage sales declined significantly during the first quarter of 2020 based on new data from the analyst firm IDC.

The firm's latest Worldwide Quarterly Server Tracker revealed that server revenue fell by six percent year over year to $18.6bn during Q1 of this year. At the same time, server shipments also declined by 0.2 percent year over year and just under 2.6m servers were shipped during that time.

Research manager of infrastructure platforms and technologies at IDC, Sebastian Lagana explained in a press release that decreased demand for x86 servers and supply chain constraints helped lead to the decline, saying:

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"Server market performance was relatively similar to the fourth quarter, albeit a bit more muted, with bright spots including the ODM Direct vendor group realizing solid demand from its core hyperscaler and cloud provider customer set, and continued strength in the non-x86 server space. That said, the OEM market faced stiff headwinds due to a combination of slowing enterprise demand for x86 servers and supply chain constraints, both driven largely by macroeconomic impacts."

Worldwide server market

When it came to server class, volume server revenue was down by 2.1 percent to $15.1bn, midrange server revenue declined by a whopping 23 percent to just under $2.6bn and high-end systems declined by 9.1 percent to just under $1bn.

Dell Technologies retained its lead in the worldwide server market during Q1 2020 with a revenue share of 18.7 percent. The second position was taken by HPE/New H3C Group at 15.5 percent followed by Inspur/Inspur Power systems at 7.1 percent. Lenovo and IBM managed to tie for fourth place with market shares of 5.6 percent and 4.8 percent respectively.

The ODM Direct group of vendors accounted for 25.9 percent of total server revenue during Q1 2020 which was up 6.1 percent year over year to almost $4.83bn. However, Dell Technologies still led the worldwide server market when it came to unit shipments, accounting for 18.4 percent of all units shipped during the quarter.

IDC also reported that all regions declined in aggregate during Q1 2020 with Japan down by 0.5 percent, followed by Latin America at -2.3 percent, China at -2.6 percent and Asia/Pacific at -3.0 percent. The US was down by 6.1 percent and the EMEA region declined by 11.8 percent year over year.