The global server market cooled in 2019, but new infrastructure boosted the market

Recently, IDC, a world-renowned research organization, released the global server market survey data for the fourth quarter and full year of 2019. According to the data, global server shipments and sales in 2019 were 11.74 million units and US$87.3 billion, respectively. Compared with 2018, they fell by 0.9% and 1.7% year-on-year. It is worth noting that in the fourth quarter of 2019, the global server market showed a growth trend, with sales and shipments increasing by 7.5% and 14.0% year-on-year, respectively, offsetting some of the decline in the first three quarters.

After looking at the overall situation, let's take a look at the specific rankings of each manufacturer. The top five manufacturers in terms of sales and market share in the global server market in 2019 are Dell, HPE, Inspur, IBM, and Lenovo. Compared with the same period in 2018, Dell's sales fell by 6.9%, HPE's sales fell by 8.4%, Inspur's sales increased by 18.1%, IBM's sales fell by 11%, and Lenovo's sales fell by 10.4%. It is easy to see from the ranking data that Inspur has grown against the trend in the context of the decline of global server manufacturers, and its market share has reached 7%, making it the only large manufacturer in the market that has maintained double-digit growth.

Compared with the year-on-year decline in the first three quarters, the global market grew rapidly in the fourth quarter of 2019. From hyperscale data centers to traditional enterprises, users have a stronger demand for emerging applications such as AI and hybrid cloud. Against this backdrop, rack servers led the growth in the fourth quarter, with sales and shipments increasing by 14.3% and 22.9% respectively. Taking Inspur, which went against the trend, as an example, its rack server business grew by 29.1% year-on-year in the fourth quarter of 2019, and the year-on-year growth for the whole year was as high as 27.9%. The rapid growth of the rack server business became the main reason for Inspur to maintain double-digit growth in 2019.

Although the global server market was in a downward trend in 2019, the author believes that the global server market will still be generally positive in 2020. First, in early March 2020, the new infrastructure policy was proposed, making it a new engine to boost economic development. The new infrastructure mainly includes seven major areas: 5G network construction, ultra-high voltage, intercity high-speed railways and urban rail transit, new energy vehicle charging piles, big data centers, artificial intelligence, and industrial Internet. Among them, there are four areas directly related to servers, which will greatly increase the demand for servers in the next few years.

As a key infrastructure, data centers were mentioned in the infrastructure investment field for the first time, which shows that data centers will play an important role in China's economic upgrading. Peng Zhen, senior vice president of Inspur Group, said: "Data centers are the way computing power exists. The country's new infrastructure policy will drive further investment and development of data center infrastructure. Investment in computing equipment such as servers and storage, as well as platform software such as cloud computing software, is expected to increase, which is a major benefit to the entire industry."

According to IDC data, in 2019, global corporate and government investments in cloud infrastructure officially exceeded spending on traditional non-cloud IT infrastructure. In the past few years, the growth of the global IT infrastructure market has mainly come from innovative applications, while traditional IT infrastructure has not grown or even shrunk. The country's new infrastructure investment will also maintain this feature, mainly used to purchase innovative products such as cloud servers, accelerate the adjustment of the market structure of IT infrastructure such as servers, and achieve industrial upgrading.

Driven by the development of 5G, edge computing will develop faster. According to Gartner's forecast, by 2020, 50% of large enterprises will include edge computing in their plans, and more than 50% of industrial IoT analysis will be performed at the edge. It is expected that by 2022, more than 50% of enterprise data will be generated or processed outside the data center or cloud. Edge computing will also greatly increase the demand for edge servers.

In addition, AI is now increasingly being applied in a wide range of industries, and the industrialization of AI is accelerating towards industrialized AI. The 2019-2020 China Artificial Intelligence Computer Development Assessment Report jointly released by Inspur and IDC shows that the Internet, smart cities, and financial industries are already leading in AI, and in the next five years, industries such as smart manufacturing and retail will also gradually achieve intelligence.

In summary, the demand for AI servers will also grow strongly in 2020. In the "China AI Infrastructure Market Research Report" released by IDC, Inspur AI servers have had a market share of over 50% for three consecutive years. With powerful AI servers, collaborative ecosystem partners can form a healthy AI industry chain, and the prosperity of the industry chain can feed back to AI server manufacturers, forming a virtuous circle.

Although the pandemic ravaged the world at the beginning of 2020. However, under the impact of the pandemic, many industries have also achieved rapid development, such as online education, online remote office, manufacturing, AI industry, etc., which have achieved several times growth. These industries have a common goal, which is inseparable from the support of servers. Taking the online education Yuanfudao as an example, during the Spring Festival, the daily active volume of the Yuantiku APP supported by Inspur computing power increased by 89.7% year-on-year, and the number of new users increased by 181.9%. Remote office services such as DingTalk and Tencent Conference have also urgently expanded the server capacity to meet the needs of corporate users.

Finally, I want to say that the epidemic is ruthless, but people can always find new opportunities in the crisis. At the same time, with the boost of new infrastructure, the demand for the server market will only be more vigorous than in 2019. Especially with the joint efforts of 5G, data centers, artificial intelligence, and cloud computing, the server market in 2020 is worth looking forward to. (Source: Zhongguancun Online)