Worldwide server market's fast growth due to rising costs, says Gartner

Cloud, digital transformation and rising component costs behind big rise in server revenues

Global server sales increased by more than one-quarter in the final three-months of 2017, according to Gartner as shipments rose by 8.8 per cent.

The big sales increase in the final quarter capped a year in which global shipments grew by 3.1 per cent and revenues by 10.4 per cent, the analyst group claimed.

Gartner research vice president Jeffrey Hewitt attributed the to "strong economies" across the world. He continued: "This was a somewhat surprising quarter because the strength was exhibited in a variety of positive server shipment and revenue mixes in almost all geographies."

In terms of regional growth, North America and the Asia/Pacific regions performed best. They posted revenue growth of 27.8 per cent and 35.1 per cent, respectively.

Server shipments in North America grew by 9.7 per cent, while Asia/Pacific saw growth of 21.2 per cent. Europe, the Middle East and Africa saw decent revenues, but shipments slid.

Japan experienced a revenue growth of 4.8 per cent, although shipments fell by 5.1 per cent. Latin America experienced decline in both shipments and revenue.

Dell and Hewlett Packard Inc (HP) continue to lead the market, with the former achieving a market share of 19.4 per cent last year, while HP was fractionally behind, with a market share of 19.3 per cent, according to Gartner.

Hewitt suggested that investment in digital transformation and cloud computing was driving server sales. "Both enterprises and hyper-scale data centres produced positive results globally for the year as end users seek to implement more digital business solutions," he said.

"The outlook for 2018 suggests that modest growth will continue, with enterprise end users taking an ongoing hybrid approach to both on-premises and public cloud choices based on their server application objectives."

However, Adrian O'Connell, research director at Gartner, suggested that while the headline figures looked positive, the main reason for the apparent strong growth was largely down to a spike in the price of memory and other components, with these costs being passed on to buyers.