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Mixed fortunes for servers: shipments down, revenue up

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According to the International Data Corporation (IDCWorldwide Quarterly Server Tracker, vendor revenue in the worldwide server market increased 4.4% year over year to $19.8 billion during the first quarter of 2019 (1Q19). Worldwide server shipments declined 5.1% year over year to just under 2.6 million units in 1Q19.

The overall server market slowed in 1Q19 after experiencing six consecutive quarters of double-digit revenue growth although pockets of robust growth remain. Volume server revenue increased by 4.2% to $16.7 billion, while midrange server revenue grew 30.2% to $2.1 billion. High-end systems contracted steeply for a second consecutive quarter, declining 24.7% year over year to $976 million.

“Demand from both enterprise buyers and hyperscale companies purchasing through ODMs was less voracious than in previous quarters; coupled with a difficult compare period from a year ago, this impacted the pace of market growth during the first quarter,” said Sebastian Lagana, research manager, Infrastructure Platforms and Technologies at IDC. “This was most evident in declining unit shipments during the quarter, although year-to-year average selling price (ASP) increases supported revenue growth for many vendors. As long as demand for richly configured servers supports further ASP growth, the market will offset slight declines in unit volume.”

Overall Server Market Standings, by Company

The number 1 position in the worldwide server market during 1Q19 was Dell Technologies with 20.2% revenue share, followed by HPE/New H3C Group, with 17.8% revenue share. Dell Technologies grew revenues 8.9% year over year while HPE/New H3C Group increased revenues 0.2%. Tied* for the number 3 position during the quarter were Inspur/Inspur Power Systems, Lenovo, and Cisco, generating 6.2%, 5.7%, and 5.3% share total server revenues, respectively. Inspur/Inspur Power Systems increased its revenue 36.4% year over year; Lenovo grew its revenue 3.9% year over year; and Cisco increased its revenue 6.9% year over year. The ODM Direct group of vendors accounted for 23.0% of total market revenue and declined -1.0% year over year to $4.55 billion.

Top 5 Companies, Worldwide Server Vendor Revenue, Market Share, and Growth, First Quarter of 2019 (Revenues are in US$ Millions)

Company  1Q19
Revenue
  1Q19
Market
Share
  1Q18
Revenue
  1Q18
Market
Share
  1Q19/1Q18
Revenue
Growth
1. Dell Technologies  $3,993.2  20.2%  $3,666.0  19.3%  8.9%
2. HPE/New H3C Groupa  $3,518.3  17.8%  $3,509.9  18.5%  0.2%
T3. Inspur/Inspur Power Systems* b  $1,219.9  6.2%  $894.4  4.7%  36.4%
T3. Lenovo*  $1,131.8  5.7%  $1,088.9  5.7%  3.9%
T3. Cisco*  $1,047.7  5.3%  $980.1  5.2%  6.9%
ODM Direct  $4,549.3  23.0%  $4,594.5  24.2%  -1.0%
Rest of Market  $4,344.3  21.9%  $4,229.8  22.3%  2.7%
Total  $19,804.5  100%  $18,963.7  100%  4.4%

Notes:

* IDC declares a statistical tie in the worldwide server market when there is a difference of one percent or less in the share of revenues or shipments among two or more vendors.

a Due to the existing joint venture between HPE and the New H3C Group, IDC will be reporting external market share on a global level for HPE and New H3C Group as “HPE/New H3C Group” starting from 2Q 2016.

b Due to the existing joint venture between IBM and Inspur, IDC will be reporting external market share on a global level for Inspur and Inspur Power Systems as “Inspur/Inspur Power Systems” starting from 3Q 2018.

Dell Technologies led the worldwide server market in terms of unit shipments, accounting for 20.0% of all units shipped during the quarter.

Top 5 Companies, Worldwide Server Unit Shipments, Market Share, and Growth, First Quarter of 2019 (Shipments are in thousands)

Company  1Q19 Unit
Shipments
  1Q19
Market
Share
  1Q18 Unit
Shipments
  1Q18
Market
Share
  1Q19/1Q18
Unit
Growth
1. Dell Technologies  517.0  20.0%  555.8  20.4%  -7.0%
2. HPE/New H3C Groupa  406.0  15.7%  455.8  16.7%  -10.9%
3. Inspur/Inspur Power Systemsb  204.9  7.9%  175.0  6.4%  17.0%
T4. Super Micro*  138.1  5.3%  156.2  5.7%  -11.6%
T4. Lenovo*  135.8  5.3%  160.7  5.9%  -15.5%
T4. Huawei*  125.5  4.9%  128.1  4.7%  -2.1%
ODM Direct  651.4  25.2%  691.1  25.4%  -5.7%
Rest of Market  403.4  15.6%  398.7  14.7%  1.2%
Total  2,582.0  100%  2,721.4  100%  -5.1%

Top Server Market Findings

On a geographic basis, Japan was the fastest growing region in 1Q19 with 9.8% year-over-year revenue growth. Asia/Pacific (excluding Japan) grew 7.4% during the quarter, while Europe, the Middle East and Africa (EMEA) grew 4.1% on aggregate. The United States grew 3.5%; Canada declined 9.6%; and Latin America contracted 14.9%. China saw its 1Q19 vendor revenues grow 11.4% year over year.

Demand for x86 servers increased 6.0% in 1Q19 to $18.5 billion in revenue. Non-x86 servers contracted -13.7% year over year to $1.3 billion.

IDC’s Server Taxonomy

IDC’s Server Taxonomy maps the eleven price bands within the server market into three price ranges: volume servers, midrange servers and high-end servers. The revenue data presented in this release is stated as vendor revenue for a server system. IDC presents data in vendor revenue to determine market share position. Vendor revenue represents those dollars recognized by multi-user system and server vendors for ISS (initial server shipment) and upgrade units sold through direct and indirect channels and includes the following embedded server components: Frame or cabinet and all cables, processors, memory, communications boards, operating system software, other bundled software and initial internal and external disk shipments.

IDC’s Quarterly Server Tracker is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly unit shipments and revenues (both vendor revenue and value of shipments), segmented by vendor, family, model, region, operating system, price band, CPU type, and architecture.

For more information about IDC’s Worldwide Quarterly Server Tracker, please contact Lidice Fernandez at 305-351-3057 or lfernandez@idc.com.

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Security gets an upgrade – with a few glitches

Video doorbells are all the rage in the USA. Can they work in South Africa? SEAN BACHER tries out the Ring Video DoorBell 2 and Floodlight Cam.

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IP cameras have become synonymous with both business and home security. They are readily available, fairly inexpensive and, in many cases, easy to install.

Many are wireless, allowing one to place the camera anywhere within Wi-Fi range. As a result, they are a solution that can be customised to suit any type of security situation.

A world leader in doorbell security, Amazon subsidiary Ring, has recently extended its range of security devices, which now includes doorbells, floodlights, and Wi-Fi extenders, all designed to enhance and complement existing security beams and electric fences.

First up is the Ring Video DoorBell 2

It doesn’t look much like your normal intercom system, except for the miniature eye that keeps track of mischief that may be happening.  

Setting up is fairly easy. All one needs to do is connect it to the network by pushing the connect button, create an account on the downloaded smartphone app and get started with customisation and certification. Features like sensitivity, alerts, and numbers where these alerts need to be sent can all be preprogrammed. It is then just a matter of positioning the doorbell to get the best video coverage.

Getting the correct position may take some time, though, as cars and pedestrians may set it off. 

Next up is the Floodlight Cam

This works much the same as the doorbell. However, it needs to be mounted to a wall. Ring has you covered there: in the box you will find drill bits, screws and even a screwdriver to help you secure the camera. 

You will have to set alerts, phone numbers, and sensitivity. The spotlight allows you to change what time it should light up and shut down, and the package also includes an alarm, should its beams be broken.

Although this all sounds good, there are a few drawbacks to the Ring solutions. Firstly, unlike the United States, where doorbells are stuck in the vicinity of a front door, allowing them to connect to a network easily, many houses in South Africa have gates that need to be opened before one can reach the front door. This means that the bells are on or near the gate, and they are unable to connect to a home or business network.

Now, however, Ring has launched a Wi-Fi extender, but this requires an additional set-up process – and a fairly expensive one, considering the camera cost.

The Ring devices come with Protection Plans that automatically upload any triggered recordings to the cloud, allowing you to view them at a later stage. This trial period only lasts for 30 days, after which the plans can be extended from R450 for a three month period, up to R1 500 for a twelve-month period.

In practice

The attention to detail in the packaging and the addition of the tools really does put the Ring in a class of its own. No short cuts were taken in its design, and you can immediately see that it’s no rip-off. However, the Protection Plans need to be looked at carefully in terms of their costs.

Aside from this challenge, I found the devices very handy inside my house. For instance, a few times my external alarm or fence would sound, at which stage I would get a notification from my armed response – while I was away. But I easily logged in to Ring from my phone to check if anything strange was happening – all in a matter of seconds and while I was sitting all the way in Berlin.

The devices are rather expensive, though, with the Video Door Bell starting at R3 500 and going up to R7 990, and the Floodlight Cam going for R5 000. It all adds up quickly.

The cost means these solutions may not be quite ready for the South African consumer looking for a complete external perimeter security system.

Despite the Protection Plans, I did find them very handy inside my house. For instance, a few times my external alarm or fence would sound, at which stage I would get a notification from my armed response.

But, I easily logged in to Ring from my phone to check if anything strange was happening – all in a matter of seconds and while I was sitting all the way in Berlin.

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It’s not a ‘techlash’ – it’s a ‘tech clash’

By RORY MOORE, Innovation Lead, Accenture South Africa

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People’s love for technology has let businesses weave it, and themselves, into our lives, transforming how we work live and interact in this new world which we at Accenture are referring to – in our Tech Vision 2020 – as the “post-digital era.” But now we are being held back.

At a time when people see the potential of embracing technology more deeply into their lives, systems and services built for a old era are not supporting where people want to go. The next five years will see radical transformation as technology is realigned to better reflect people’s needs and values.

We look at the latest emerging trends that will transform how we live in work in this fundamentally different post-digital world.
Tech trend 1: “The I in experience” – helping people choose their own adventure

The next generation of technology-driven experiences will be those that make the user an active participant in creating the experience. Businesses are increasingly looking to personalise and individualise experiences to a greater degree than ever before, but are faced with stricter data regulations and users that are wary of services being too invasive. To address this, leading businesses are changing the paradigm and making choice and agency a central component of what they deliver.

Tech trend 2: “Artificial intelligence (AI) and me” – reimagining business through human and AI collaboration

Businesses will have to tap the full potential of AI by making it an additive contributor to work, rather than a backstop for automating boring or repetitive tasks. Until now, enterprises have been using AI to automate parts of their workflows, but as AI capabilities grow, following the old path will limit the full benefit of AI investments, potentially marginalise people, and cap businesses’ ability for growth. Businesses must rethink the work they do to make AI a generative part of the process. To do so, they will have to build new capabilities that improve the contextual comprehension between people and machines.

Tech trend 3: “The dilemma of smart things” – overcoming the “beta burden”

As enterprises convert their products into platforms for digital experiences, new challenges arise that, if left unaddressed, will alienate customers and erode their trust. Now that the true value of a product is being driven by the experience, a facet of the product that enterprises have traditionally retained strict control over, businesses must re-evaluate central questions: how involved they are with the product lifecycle, how to maintain transparency and continuity over product features, when is a product truly “finished”, and even who owns it?

Tech trend 4: “Robots in the wild” – growing businesses’ reach and responsibility

Robotics are no longer contained to the warehouse or factory floor. Autonomous vehicles, delivery drones, and other robot-driven machines are fast entering the world around us, allowing businesses to extend this intelligence back into the physical world. As 5G is poised to accelerate this trend, every enterprise must begin to re-think their business through the lens of robotics. Where will they find the most value, and what partners do they need to unlock it? What challenges will they face as they undergo this transformation, and what new responsibilities do they have towards their customers and society at large?

Tech trend 5: “Innovation DNA” – creating an engine for continuous innovation

Businesses should assemble their unique innovation DNA to define how their enterprises grow in the future. Maturing digital technology is making it easier than ever before to transform parts of the business, or find new value in share tools with others. The three key building blocks of innovation DNA are:
Continue on the digital transformation journey
Accelerate research and development (R&D) of scientific advancements and utilise elements such as material sciences and genomic editing to ensure practical applications are leaving these labs quicker than ever before
Leverage the power of DARQ (distributed ledger technology, AI, extended reality and quantum computing) to transform and optimise the business
Differentiation in the post-digital era will be driven by the powerful combinations of innovation and these building blocks will enable exactly that.

It’s not a “techlash”, it’s a “tech-clash”

Essentially, this new digital world is more intimate and personal than ever imaginable, but the models for data, ownership, and experience that define that world have remained the same.

Tech-clash is a clash between old models that are incongruous with people’s expectations. The time to start transformation is now. To this end, businesses need to defuse the tech-clash, build human-centered models and foster deeply trusting relationships.

For more information on how Accenture can help enterprises adopt the latest tech trends to future-proof their businesses in the post-digital era, go to: https://www.accenture.com/za-en.

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