Dell EMC and Hewlett Packard Enterprise (HPE) typically battle for the top server vendor spot in market reports, and the latest from both Gartner and IHS Market aren’t any different. But over the past few years, another lesser known company — Inspur — has steadily climbed the ranks as it pursues its goal to become the top server market vendor by 2023.
Inspur plans to achieve that top spot by continuing its open compute push, selling more X86 servers to telecommunications customers as this sector moves toward disaggregated hardware and software, and helping its customers transition to bigger deployment volumes, said Alan Chang, senior director of Inspur’s server business unit.
“The next-wave clients will see new challenges arise as they grow, and Inspur is going to be there to help them solve all these challenges because we might have already seen them while working with hyperscaler [cloud providers] today,” he said.
Global Server Market
According to Gartner, Dell EMC secured the top spot in the worldwide server market based on revenue in the fourth quarter of 2018. The vendor ended the year with 20.2 percent market share, followed by HPE with 17.7 percent, Huawei with 8.3 percent, and Inspur and IBM tied with 8.2 percent.
When it comes to server shipments, Dell EMC also maintained the No. 1 position in the fourth quarter of 2018 with 16.7 percent market share. HPE secured the second spot with 12.2 percent of the market and Inspur took third at 8.5 percent. But while both Dell EMC and HPE experienced declines in server shipments, Inspur saw strong growth with a 24.6 percent increase in shipments in the fourth quarter of 2018.
It’s also worth noting that Huawei and Inspur both saw massive growth during the final three months of last year, growing 45.9 percent and 42.9 percent, respectively, compared to the same quarter in 2017.
Meanwhile, the most recent IHS data center server report found that white box server vendors led the market, which climbed to $22.8 billion in the fourth quarter of 2018. White box vendors led in terms of both server-unit shipments (29.2 percent) and revenue share, with 20.2 percent in the fourth quarter of 2018.
Dell EMC followed with 18.8 percent of server-unit shipments and 19.5 percent of revenue share. HPE came in third with 12.6 percent of units shipped and 16.7 percent of revenue. And Inspur placed fourth with 9.4 percent of units shipped and 7.9 percent of revenue.
Both firms’ market reports show Inspur climbing in both servers shipped and revenue market share.
Who Is Inspur?
The China-based vendor got its start in the 1906s. At that time it was called Shandong Electronics Device Plant and it produced computer peripheral devices and low-frequency high-power transistors. It started transitioning to servers in the mid-2000s, but didn’t open its first factory outside of China until 2015. A year after opening that facility in California, Inspur claimed 5 percent of the global server market by shipments, according to IHS Markit. By 2017 that grew to 8 percent and then to 9.4 percent by the end of last year.
“A lot of our growth is coming from China but we only started selling in the U.S. about 3 years ago,” Chang said during an interview at last week’s Open Compute Project (OCP) Global Summit.
In those three years the vendor has made some smart, strategic moves, targeting hyperscaler cloud provider customers and open compute. It joined OCP and donated compute nodes designed for cloud hyperscale data centers. Inspur also participates in and donates server configurations to other open source data center groups including Open19 and China’s Open Data Center Committee (ODCC). In fact, Inspur claims it’s the only server vendor in the world to participate in all of the open source hardware projects.
“We see the trend about becoming even more open on communications between Open Compute Project, ODCC, and Open19,” Chang said, noting that this year LinkedIn contributed Open19 to OCP and Tencent hosted the first OCP event in China. “All these open talks and collaboration leads to a very strong JDM case that needs a system design house like Inspur. This is another growth engine that we expect to pick up in the next couple years.”
Betting Big on AI
Baudi, Alibaba, and Tencent are Inspur customers — the vendor says it fulfills 90 percent of these three cloud giants’ AI-server demand. When asked about U.S.-based cloud customers, Chang says he can’t name names. “But I can tell you multiple people in the top CSPs are coming to us right now,” he added.
The vendor continues to build a strong brand for itself in the artificial intelligence (AI) and edge computing markets. Among other moves, it partnered with Intel at last week’s OCP Global Summit and with Nvidia at this week’s GPU Technology Conference. “AI is really hot, not just in the U.S. but also in China,” Chang said.
Last week Inspur announced new server platforms for deep learning and AI and partnered with Intel on what it calls “a high-density cloud-optimized platform.” This product condenses a four-socket server into half the usual space. “We have a 2U box with the equivalent of four CPUs in it, so you create double the density of how many CPUs can interact,” Chang explained.
The new platform also supports up to eight PCI-E expansion cards, including graphic processor units (GPUs) and network adapters.
This means enterprises can run multiple or demanding workloads like AI on a smaller server, and cloud service providers can essentially double the number of virtual machines [VMs] per server. “There’s savings on the networking, and there’s also a lot of value for the cloud service providers to offer this cloud-optimized solution,” Chang said. “VMs are a big use case for the cloud service providers.”
This week Inspur announced two additional AI servers using Nvidia GPUs. One is designed for deep learning and high-performance compute applications including voice recognition, video analysis, and intelligent customer service. The second targets compute-intensive AI applications such as autonomous vehicles, smart cities, and smart homes, as well as 5G edge applications like IoT, multi-access edge computing, and near-field communication.
How Will It Win?
When asked how Inspur plans to take more market share from Dell EMC and HPE, Chang said “specialization is one of our key differentiators.” It uses what it calls “common building blocks” for enterprise and cloud provider customers, “so when a customer has a different need we can pull from a database and have all of these different components put together, like a Lego concept,” he explained.
IHS Markit analyst Vlad Galabov agreed that Inspur’s recent performance is noteworthy, and wrote about the vendor’s market leader aspirations in a January report. “Inspur is sending a clear challenge to established server veterans HPE and Dell,” he wrote, adding that it’s making big investments in AI, cloud service providers, and a diverse portfolio.
By its own timeline, Inspur’s got four more years to prove that these bets will pay off.