Dive Brief:

• Vendor revenue in the worldwide server market declined in the final quarter of last year, according to new reports from both Gartner and International Data Corporation (IDC). IDC found revenue declined 4.6% year over year to $14.6 billion in the fourth quarter of 2016, while Gartner found worldwide server revenue declined 1.9% year over year over the same time period.
• Hewlett Packard Enterprise (HPE) is still the number one vendor in the space, according to both analyst firms, with a market share around 23%. Dell Technologies remained in the number two position, followed by IBM and Lenovo.
• Asia/Pacific was the only region to see growth in server shipments and revenue in the fourth quarter, according to IDC.

Dive Insight:

There’s less demand for traditional servers today as enterprises leverage virtualization and cloud technology. For many businesses, moving to the cloud can be a hard proposition to pass up because with cloud, companies don’t have to pay huge sums of money to buy new infrastructure, and they can easily scale up or down to meet their changing needs.

HPE and Dell have been neck and neck in the server market for years. Now that Dell has merged with EMC, the company could be poised to take the leading spot in the market. According to IDC, Dell is already moving ahead of HPE when it comes to server shipments. Dell grew 6.5% in worldwide server shipments in Q4 2016, while HPE experienced a decline of 19.4%, IDC reported. With Dell now winning in shipments, revenues are sure to follow.