The shipment of entry-level X86 servers in Q1 2013 was barely satisfactory, with one-socket rack servers and one-socket tower servers declining by 11.7% and 35% respectively year-on-year. The decreasing growth rate of such volume server products reflects weak demand from the channel market.

However, the year-on-year growth rate of the four-socket server market was still higher than the average growth rate of the market. Government, finance and utilities industries were the main drivers of growth four-socket servers, with shipment in the finance and utilities industries increasing by 19.5% and 73.9% respectively year-on-year.

Grace Cui, Market Analyst, Enterprise System and Software Research, IDC China says, "The four-socket X86 server platform can meet the market demands for database and virtual workload integration, as well as the shift from Unix to Linux. High-end servers would become an important engine for the growth of China X86 server market."

In addition, the year-on-year growth rate of two-socket rack servers, that accounted for about 65% of the shipment of the overall X86 server market, was well above the average growth rate of the X86 server market in Q1 2013.

Eric Peng, Senior Market Analyst, Enterprise System and Software Research, IDC China adds, "This is mainly due to the fact that web 2.0 companies increased their procurement for scale-out storage servers. The growth driven by demands from the minority of industrial customer emphasizes the weak growth of the overall X86 server market."

Allocation of shipments by industries.[Graph/IDC]

The media and government have become the two most important segment markets for X86 servers in China, accounting for 50% of the overall market shipment in Q1 2013.

1. Website, a submarket of the media industry, increased rapidly in terms of X86 servers purchase, with BAT (Baidu, Alibaba and Tencent) accounting for over 50% of the entire internet industry. Evidently, local server vendors became the major player in the market. The broadcasting submarket also increased more than 30%, mainly due to a surge in demands from media editing business.

2. Government's demands for X86 servers slowed down in Q1 2013, with the submarkets of public security and army still maintaining more than 25% growth rate. The project for health informatization construction launched by the Ministry of Health was the main driving force in the market.

3. The utilities' demands for X86 servers remained strong because of the continuous investment in electric power informatization by the state. Local vendors took advantage of the utilities competition, pushing the shipment of high-end servers.