Combined revenues from server computing products sold to enterprise customers through the distribution channel in Western Europe (WE) increased by +11.3% year-on-year in September 2018, according to the latest distribution data published by Context, the IT market intelligence company. The product segments grouped in this meta-category are preconfigured server systems, random access memory (RAM), processors, hard-disk drives (HDDs) and solid-state drives (SSDs). The growth was driven by a number of trends, among them the ongoing adoption of SSD upgrades and increase in sales of RAM upgrades.
In September 2017, SSDs and RAM upgrades were the only products that saw significant revenue growth but by September 2018 this had slowed to a single digit or was almost flat. There have been shortages of both products in the market over the past year and, while the situation has improved, the achieved average selling price (ASP) of RAM has not yet declined, although a year-on-year comparison shows price adjustments for some SSDs. This month also saw revenue from pre-configured server systems grow by +15.2% year-on-year, as companies continue to refresh their servers. A +33.1% increase in revenues from server processor upgrade options may be the consequence of customers taking precautions following Intel’s announcement that supply of processors, including Xeon Scalable processors, is “undoubtedly tight”.
Looking at revenue share over the last two years, it is clear that RAM has made an increasingly important contribution to overall server computing revenues. The increase of achieved ASPs due to supply constraints has been partly responsible for this. Over the same period, the revenue share of SSDs has increased in tandem with the slow but steady decline of that from HDDs. However, the revenue share of preconfigured server systems has remained fairly consistent with a continuous decline in units sold balanced by an increase in achieved ASPs.