Follow Us

We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message

Chinese server vendors rise on demand from local Internet giants

China's "hyperscale" server segment is fast-growing, and adding to the demand, according to IDC

Article comments

Chinese server vendors are making big gains in their home market, and putting pressure on U.S. rivals Hewlett-Packard and IBM in the "hyperscale" segment, according to research firm IDC. Dell, though, remains the country's number one server vendor.

In this year's first quarter, Huawei Technologies and Inspur saw their market shares reach 13.7 percent and 12.1 percent respectively. It's a big change from a year ago, when the two companies' market share was still in single digits, and they lagged behind HP and IBM.

As Huawei and Inspur rise, HP's and IBM's server shipments in China are declining. IBM was in a solid second place behind Dell a year ago, but its market share fell to 12.1 percent in this year's first quarter. As for HP, its share 2 percentage points over the year, to 12.8 percent.

Driving the Chinese vendors' business is growing demand for hyperscale servers from the country's Internet giants, including search company Baidu and e-commerce firm Alibaba Group. The hyperscale segment makes up a third of China's x86 server market, and is fast growing, said Eric Peng, an IDC analyst, on Friday.

"The Internet companies are buying so many servers, the hyperscale industry is shaping the market," he said. "The Chinese vendors are putting more focus on this segment."

Dell continues to lead China's x86 server market with a 20.2 percent share. But Chinese vendors are catching up, at a time when servers are also becoming more commoditized with the availability of Intel chips, Peng said.

"The differences in quality between server products is small," he added. "The profit margin is shrinking."

The market is also set to change with Lenovo's planned acquisition of IBM's x86 server business, announced back in January. In this year's first quarter, Lenovo had a 12.8 percent share of the country's market.

The Chinese server market itself grew 24.5 percent year over year, with server market revenue hitting US$1.7 billion. China's government departments, and state-owned telecommunication firms and banks, are also investing heavily in upgrading their IT systems, helping to drive server demand, according to IDC.

China has often favored buying from local tech suppliers over foreign vendors. But that trend could accelerate even more from fears of U.S. electronic spying creeping into the country. In May, the Chinese government said it would block companies from selling IT systems in the market if they failed to pass a new "cybersecurity vetting system."

What effect these security fears will have on the market is still difficult to gauge, Peng said. But even if U.S. vendors face some resistance, the China's server market is still a big pie, with demand growing fast in the commercial sector. "There will still be a lot of opportunities. Even with the local vendors competing, I think the market will be big enough for everyone," he added.



Share:

More from Techworld

More relevant IT news

Comments



Send to a friend

Email this article to a friend or colleague:

PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.

Techworld White Papers

Choose – and Choose Wisely – the Right MSP for Your SMB

End users need a technology partner that provides transparency, enables productivity, delivers...

Download Whitepaper

10 Effective Habits of Indispensable IT Departments

It’s no secret that responsibilities are growing while budgets continue to shrink. Download this...

Download Whitepaper

Gartner Magic Quadrant for Enterprise Information Archiving

Enterprise information archiving is contributing to organisational needs for e-discovery and...

Download Whitepaper

Advancing the state of virtualised backups

Dell Software’s vRanger is a veteran of the virtualisation specific backup market. It was the...

Download Whitepaper

Techworld UK - Technology - Business

Innovation, productivity, agility and profit

Watch this on demand webinar which explores IT innovation, managed print services and business agility.

Techworld Mobile Site

Access Techworld's content on the move

Get the latest news, product reviews and downloads on your mobile device with Techworld's mobile site.

Find out more...

From Wow to How : Making mobile and cloud work for you

On demand Biztech Briefing - Learn how to effectively deliver mobile work styles and cloud services together.

Watch now...

Site Map

* *