A last hurray before the server market downturn
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In addition to several large scale professional service providers and cloud service provider other than the brakes, for the service provider, it could face decades of a disaster. Due to the outbreak and some of the structural problems of individual economies worldwide coronavirus, we no longer think the economy is no longer only a national matter, might now be high for several quarters or even years.
The Next Platform, founded in 2015, but our experience in the market system can be traced to the 1987 stock market crash, crash eventually led to the recession of the late 1980s and early 1990s, until the Internet bubble burst, really resolved. The arrival of prosperity, to science and technology as well as "e-commerce" industry into a lot of hope and cash.
When looking for IT transition point, we believe that the Great Depression was a time point of many industries took a new turn. Accordingly, the financial analysis can usually be traced back to the Great Depression, because we want to see how the situation now compared to then go through the tough times.
According to market research firm IDC, the time from the beginning of the recession has passed twelve years, the fourth quarter of 2019, server shipments grew 14 percent to 3.4 million units, revenue increased by 7.5% to 253.5 One hundred million U.S. dollars.
Mainly due to revenue growth this quarter, ultra-large-scale professional service providers and cloud service providers have invested heavily in infrastructure, provide ODM equipment sales to 105 million machines these companies grew by a staggering 53% and promote revenue increased 37.9% to $ 6.47 billion.
Clearly, the ultra-large-scale professional service providers and cloud service providers to purchase major x86 server, and as the competition between Intel and AMD increasingly intense, ultra-large-scale professional service providers to reach a lot of trading on the processor, which AMD high cost to compete, while Intel is constantly striving to maintain the competitiveness of products and maintain profit margins.
Do not feel sorry for Intel, even in the face enormous competitive pressures, the chip giant is the data center's revenues hit a record operating profit is very high. IBM's System z mainframes also have increased in the quarter, driven Big Blue's revenue grew 17.6%, only slightly less than $ 2.3 billion. Due to the growth in China and Power x86 server business, the tide's revenue grew 12.1 percent to $ 1.74 billion.
Other server makers a few percentage points either up or down by a few percentage points. As we said recently in the analysis of Dell's data center operations and HPE in as the two companies as well as smaller enterprise-class cloud Tier 2, the company's telecommunications service providers. Dell and HPE different fiscal year with the calendar year, IDC therefore adjust their accounts data cycle for us.
IDC estimates that in the fourth quarter, Dell's sales of $ 3.99 billion, down 9.9% from the factory to the customer's server or channel is 549,488 units, down 5.4%. HPE aspects, including its H3C partners in China's shipments, HPE achieve 4.7% growth in shipments reached 507,228 units, received $ 4.14 billion in revenue, down 3.4%, but this is the HPE during the quarter again into the top ranks of server manufacturers, once already for some time on this distance.
Lenovo server sales of $ 1.42 billion, a decrease of 2.6%. Huawei's sales of $ 1.28 billion, an increase of 1.8%. We estimate that Cisco's sales of just under $ 1 billion, an increase of 6%.
Honestly, OEM manufacturers in the fourth quarter 2018 performance is quite good, despite the decline in the ODM is very large.
This is the server statistics collection, according to data of the past two years, and some had to be estimated (bold red):
Data shown below the graph can be traced during the Great Depression:
Now, if these figures IDC's some math, you will find, if you take out the impact of ODM, they accounted for 25.5% of total sales in the fourth quarter of 2019, the income of the rest of the server market is very dull. This is better than the second-quarter revenue fell 8 percent, revenues for the third quarter fell 6.6%, but the difference is that IBM's System z15 increase sales.
Exclude this, we once again return to the negative point of view, including enterprises, service providers and telecommunications companies x86 server. (As a group, Intel said its Data Center Group's telecommunications service providers and business customers in the fourth quarter increased 14 percent, and business declined by 7%, which server sales during this period and quite IDC analysis.)
We can see that because Intel and AMD competition in terms of server CPU and DRAM and flash memory prices decline, the average cost x86 servers have been declining in extent.
x86 server platform still accounts for more than 98% of total server shipments grew 12.9%, reaching 3.35 million units (98.5% out of total shipments) revenue of $ 22.44 billion (89% of total revenue). Non-X86 server shipments grew 17.8 percent to $ 2.91 billion, IBM's System z and Power Systems equipment accounted for 78.8% of non-X86 server market share.
We have calculated the speed since the Great Depression, recently calculated the amount of growing faster than the price decline:
As you can see, in recent years, the amount of computation in great demand, mainly due to large scale professional service providers and cloud computing technology provider facilities. If there is a recession, the piece of the curve can be steep much? Perhaps the answer can be found.
IDC did not break out a glimpse of what coronavirus, which is understandable, because the impact of supply chain disruptions server for all walks of life involved in business, government, service providers, professional service providers and large scale cloud service providers. No one knows the specific situation. The prediction error on the global economy are too great, because the impact of economic trends in some of the many potential variables are changing.
Frankly, if we do fall into a recession, then there is no doubt at some point we will build a platform of change, which occur again and again. Platform transition is not, but usually because of the recession accelerated by the recession caused, especially if the company can save money or do what they always wanted to do, or better still never even thought about doing.
The mid-1970s recession for some time, helping transferred to a proprietary microcomputer, after wandering for some time, and then there was a mild recession in 1979 after the Iranian revolution. At that time, IBM and HP's proprietary minicomputers began to rise, because the company wants its background and factories through a computerized process, but they can not afford mainframes.
To the late 1980s, Wall Street, oil price shocks and "irrational exuberance" shocked the whole economy, RISC / Unix also benefited.
Internet bubble period from 1995 to 2001, a time when Unix revolution, then Intel hardware and the rise of Linux and Windows Server, after the September 11 attacks on the United States, we have experienced a recession, this is indeed the RISC / Unix systems in trouble, but let Intel x86 server chips, and AMD Opterons rise in a few years, these systems continued until 2009 when the great Depression began, Intel reference AMD, created the "Nehalem" Xeon architecture, still today in the data center use it.
When the last recession hit, VMware provides a reliable enterprise-class server virtualization platform that allows companies to pass workloads on physical servers polymerized onto virtual machines on physical servers with higher utilization run existing equipment. AMD made some compromise on the architecture, and there are some errors in the chip, resulting in server manufacturers do not wait. They are all behind Nehalem, and Cisco Systems do everything blend of computing and networking functions, and the establishment of Nutanix (established in 2011) over the same time provide integration, setting off a craze for the entire server industry integration platform.
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