Despite the rush to software-defined-everything, there is still a lot of hardware being sold, and the latest sales/shipment data from IDC and Gartner offer a number of interesting insights into this far-from-dead IT segment. For instance, HP seems to have recovered nicely from its recent trials and tribulations and has scored impressive results in storage and servers, while the newly privatized Dell’s struggles appear to be lingering on.
Usually, the research numbers tend to be similar, but while IDC gives HP just 6.5% growth in revenue, and a 9.6% share of the 4Q13 external disk storage system market, Gartner somehow came up with a 25.3% surge for the same period on the same market share. Gartner reported revenue grew 5% year-over-year to $6.3 billion last year, while IDC put this segment at $6.9 billion on a YoY increase of 2.4%.
“Following an abysmal third quarter, the fourth quarter of 2013 returned to growth. Driven by pent-up demand and the year-end budget flush phenomenon, the market overcame a fragile global economy and grew a strong five percent over the same period in 2012” said Roger Cox, research vice president at Gartner.
“The disk storage systems market was able to break free of recent headwinds due to traditional year-end budget flushes, improved economic sentiment, and a strong desire to address long-standing storage infrastructure inefficiencies,” said Eric Sheppard, Research Director, IDC Storage. “Industry stakeholders able to capitalize the most on this demand were often those with recent product refreshes and strong go-to-market initiatives targeted at integrated infrastructure and storage optimization.”
Although it paled in comparison with HP’s results, EMC turned in a respectable 9.2% revenue increase, and accounted for 36% of the market, according to Gartner. IBM (-7.8%), NetApp (3.3%), HP, Hitachi/HDS (-4.8%) and Dell (-14.4%) rounded out the top six and accounted for more than 84% of the total market, Dell (-11%), which came in fourth for disk storage systems sales in IDC’s 4Q13 results, didn’t make the top 5 in the external disk segment. EMC (32.9% market share), up 9.9%, was followed by IBM (-10.6%), NetApp (1.5%), HP and HDS (-5.6%).
Last quarter’s server shipments grew 2.1%, while revenue decreased 4.5%, according to Gartner. HP (28.1% market share) was up 6%, followed by IBM (-28.9%), Dell (-0.5%), Cisco (34.5%), and Oracle (-4.7%).
“2013 presented some pronounced differences in various server market segments,” said Jeffrey Hewitt, research vice president at Gartner. “We’ve seen ongoing growth in Web-scale IT deployments, while the enterprise remained relatively constrained.”
“In terms of hardware platform types, mainframe and RISC/Itanium Unix platform market performance kept overall revenue growth in check,” he said.
IDC reported both higher server shipments (8.2%) to 2.5 million units, and a slightly smaller (-4.4%) revenue decline, to $14.2 billion for 4Q13. HP (26.9% market share), was up 5.7% and narrowly beat out IBM (26.8%), which saw a -28.5% revenue drop, followed by Dell (-2.4%), Cisco (34.5%), and Oracle (-2.2%).
“While a record number of servers shipped in 4Q13, the market was constrained by weak demand for midrange and high-end systems,” said Matt Eastwood, Group Vice President and General Manager, Enterprise Platforms at IDC. The Unix market continued its decline, and mainframes had large declines, amid explosive growth in hyperscale and ODM Direct sales.
As the Unix server market continues to undergo consolidation and price compression, and as mainframes find their niche, IDC believes that the server market is very close to a tipping point, when hyperscale growth will be large enough to overshadow declines in the high-end. The additional growth in ODM Direct sales, spurred most recently by massive datacenter expansion by some of the largest service providers, will help the server market reach that tipping point faster.
On the networking side, the 4Q13 Ethernet switch market (Layer 2/3) reached a record $5.96 billion, while, the router market jumped 2.2% year over year. There was strong growth in the 10Gb Ethernet switch (Layer 2/3) and port shipments , which were up YoY 9.3% and 35.5%, respectively.
While Cisco’s switch market share held steady at 61.3%, its 10GbE share was 64%. HP’s performance was strong, if not on par with its storage results, growing 3.6% YoY, on a 9.3% share of the overall market.
“The worldwide Ethernet switch market is increasingly diverging into two market segments with different market dynamics – the enterprise campus segment, which includes the network edge that integrates mobility, and the higher growth datacenter segment,” said Rohit Mehra, Vice President, Network Infrastructure at IDC. “Taking into account fairly significant regional variations, the campus segment is relatively stable while the datacenter continues to reflect the rapid explosion of 10GbE and 40GbE switch ports shipments.”
Finally, there’s the security appliance market. Factory revenue was up 6.8% year over year to $2.4 billion, as shipments increased 0.6% to 546,384 units. Cisco (18.1%) continued to lead the overall security appliance market, due in large part to its Sourcefire acquisition. Check Point (12.7%) held the number 2 spot, followed by Fortinet (6.6%), Juniper, which posted a decline, and fifth-place Palo Alto Networks (5.4%) turned in an impressive 47.7% increase compared to the prior year.