MEA x86 Server Market Enjoys Strong Growth in Q3 2013, Says IDC

The Middle East and Africa (MEA) x86 server market played host to significant year-on-year growth in the third quarter of 2013, according to the latest insights from International Data Corporation (IDC). Referencing its latest 'EMEA Quarterly Server Tracker', the research and advisory firm today announced that the MEA x86 server market expanded 9.9% in volume during Q3 2013, with revenue rising 10.6% over the same period.

The Saudi market was the standout performer of the quarter in the GCC, registering strong year-on-year volume growth of 16.4%. "Several major deals were completed with various government ministries, banks, and education institutes during the quarter, combining to drive the strong growth seen in Q3," says Zeeshan Gaya, research manager for servers and systems at IDC Middle East, Africa, and Turkey. "The UAE market also exhibited strong year-on-year growth, with shipments increasing 13.0% on the back of key projects taking place in the government and banking sectors."

In contrast the so-called 'Other GCC' (OGCC) bloc of countries, comprising Bahrain, Kuwait, Oman, and Qatar, suffered a marginal 1.8% decline in volume over the same period, although there was a significant year-on-year increase of 22.6% in revenue. The growth in revenue came as a direct consequence of the average selling price of a server increasing 24.8% compared to Q3 2012.

As expected, the Egyptian market slumped 36.6% year on year in volume terms as a result of severe project delays and cancellations brought about by the ongoing political instability in the country and associated uncertainty. Indeed, the only noticeable projects seen in Egypt during Q3 2013 were for the Egyptian Stock Exchange and within the defense sector.

Turkey also experienced a downward trend in the third quarter of the year, with unit shipments dipping 8.8% year on year. The government, banking, and telecommunications sectors were the key IT spenders in the country during this period. "The Turkish government is proactively taking necessary measures to increase the economic and political resilience of the country," says Adriana Rangel, research director for systems and infrastructure solutions at IDC Middle East, Africa, and Turkey. "It is also striving to improve the investment environment in an attempt to facilitate and stimulate continuous economic growth. Additionally, local elections scheduled for mid-2014 are expected to have a positive impact on IT spending in the country."

Strong year-on-year shipment growth of 35.7% and 21.8% was recorded in Morocco and Tunisia, respectively, stimulated by the stable nature of the political situation in these countries and corresponding investments in the government, banking, and telecommunications sectors. Overall, the North Africa region performed well in Q3 2013, registering a 20.4% increase in volume when compared to the corresponding quarter in 2012.

The Kenyan and Nigerian markets secured the highest growth seen across the entire MEA region in Q3 2013, registering an annual shipment growth of 67.1% and 62.8%, respectively. "Sizeable projects conducted by financial institutions and telecom operators contributed to the strong server growth seen in Nigeria, while the majority of large deals conducted in Kenya during the third quarter of the year were in the banking and utilities sectors, with the government sector taking a back seat," says Gaya.

South Africa experienced a 6.6% year-on-year increase in server shipments, driven primarily by investments in the government and financial services sectors. "Server uptake in the small and medium-sized business (SMB) space was sluggish in South Africa during Q3 2013, with the majority of spending coming from the enterprise segment," continues Gaya. "The purchasing pattern among mid-to-large organizations has been gradually shifting from standalone servers to converged and integrated solutions. However, some large government deals are in the pipeline for Q4, with a particular emphasis on egovernment initiatives such as smart energy management solutions and smart city programs."

Growth was seen across all the major form factors in the MEA region during Q3 2013. Blades were the market's strongest performers, with shipments up 27.5% year on year, followed by rack-optimized and tower servers, with increases of 8.7% and 3.2%, respectively. Bucking the trend somewhat, shipments of density-optimized servers were down 22.9% year on year across the MEA region.

Shipments of one-socket servers grew an impressive 24.8% over Q3 2012, securing market share of 30.4%, up 3.6 percentage points higher than last year. Two-socket servers remain the dominant socket capability, however, comprising more than half of the MEA market with 65.1% unit share. Four- and eight- socket servers continued to grow in the third quarter of the year, recording year-on-year volume increases of 24.3% and 47.4%, respectively.

About the Research

IDC's 'EMEA Quarterly Server Tracker' is a quantitative tool for analyzing the server market on a quarterly basis. The tracker includes quarterly shipments (both ISS and upgrades) and revenues (both customer and factory), segmented by vendor, family, model, region, country, operating system, price band, CPU type, and architecture.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For more than 49 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

IDC in the Middle East, Africa, and Turkey

For the Middle East, Africa, and Turkey region, IDC retains a coordinated network of offices in Riyadh, Casablanca, Nairobi, Lagos, Johannesburg, and Istanbul, with a regional center in Dubai.  Our coverage couples local insight with an international perspective to provide a comprehensive understanding of markets in these dynamic regions. Our market intelligence services are unparalleled in depth, consistency, scope, and accuracy. IDC Middle East, Africa, and Turkey currently fields over 125 analysts, consultants, and conference associates across the region.