2Q20 EMEA Server Spending Decreased 5.8 Percent

2Q20 EMEA Server Spending Decreased 5.8 Percent
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In the second quarter of 2020, the EMEA server market reported a year-on-year (YoY) decrease in vendor revenues of 5.8% to $3.9 billion and a YoY decrease of 6.9% in units shipped to around 470,000, according to IDC. Top vendor is HPE with 26% share and $1,02 billion in revenue.

Dell came second grabbing 20% of the market, but with loss in share and revenue. ODM direct is third with 14% share, ahead of Lenovo and IBM which both had 10% share respectively. IBM had the strongest growth in terms of revenue compared with the first quarter (79%). Other vendors managed to get the remaining 23% of the EMEA server market.

When viewing the EMEA market by product detail, the impact of COVID-19 can clearly be seen, as the SMB market has both seen a slowdown in run rate business and faster adoption of cloud platforms. Tower shipments in 2Q20 decreased 32.5% QoQ, while custom shipments targeted toward cloud platforms grew 8.9% QoQ. Lenovo continued to penetrate the hyperscale market and saw significant growth in 2Q20. Standard rack-optimized shipments increased 0.8% QoQ in units, though revenues grew 5.1% YoY.

"This strong growth in ASPs is a result of both a shift toward higher socket counts and richer configuration component configurations as the market grapples with digital transformation to ensure business continues in these trying times," said Eckhardt Fischer, senior research analyst in the European Infrastructure group.

"ODM shipments are back to pre-COVID levels worldwide and ODM manufacturing facilities are reporting 24 x 7 activity to close the gap in production caused by anti-COVID measures earlier this year and meet COVID-related demand for cloud-deployed digital services," said Kamil Gregor, senior research analyst in the European Infrastructure group. "In the short term, it seems that a 1Q20 drop in consumption has been overcome, but we still need to wait for the longer-term impact of the economic slowdown on infrastructure vendors and buyers and consumers of digital services.

Looking at the Western European x86 server market, the U.K. performed well, growing 11.8% YoY in revenue, driven by hyperscale datacenter investments. The same trend was seen in the Netherlands and Ireland in 2Q20. With around $660 million in revenue, Germany maintained its position as the region's largest market.

Central and Eastern Europe, the Middle East, and Africa [CEMA] server revenue continued its downward trajectory in 2Q20, declining 5.9% year over year to $791.31 million. The Central and Eastern Europe [CEE] subregion grew 6.9% year over year with revenue of $424.83 million. The Middle East and Africa [MEA] subregion declined 17.3% year over year to $366.48 million in 2Q20.