Server revenues hold up as sales dip

 Unit sales in the server market might have slowed in the first quarter but vendors were still able to enjoy revenue improvements thanks to increased ASPs.

A review of the global server market from IDC found that although demand had dropped year-on-year in Q1 by 5.1% the higher unit prices improved revenue by 4.4%.

Low-end and mid-range servers fared much better than higher-end products, which suffered a 24.7% decline, a second consecutive quarter of decline.

"Demand from both enterprise buyers and hyperscale companies purchasing through ODMs was less voracious than in previous quarters; coupled with a difficult compare period from a year ago, this impacted the pace of market growth during the first quarter," said Sebastian Lagana, research manager, Infrastructure Platforms and Technologies at IDC.

"This was most evident in declining unit shipments during the quarter, although year-to-year average selling price (ASP) increases supported revenue growth for many vendors. As long as demand for richly configured servers supports further ASP growth, the market will offset slight declines in unit volume," he added.

Dell was at the top of the pile when it came to market share stats, with a 20.2% share, thanks to a 8.9% y-o-y improvement. HPE was the closest rival with a share of 17.8%. Inspur/Inspur Power Systems, Lenovo and Cisco were all tied for third place.

HPE has made it clear that it is cranking up its server activities in the SME market and recently added more bundles to attract customers in that segment for channel partners to take out to market.

In Dell's most recent financial results the server side showed some weakness with a decline in the vendor's infrastructure sales but the impact of the China US trade war was largely blamed for the numbers.