According to IDC's EMEA Quarterly Server Virtualisation Tracker, 33.0% of all new servers shipped in EMEA in the fourth quarter of 2013 were virtualized, a moderate increase from 30.0% in 4Q12. Physical server shipments were flat this quarter, showing only a 0.3% decline year-over-year, totalling 606,400 units.
At the same time 200,300 server units were virtualised at the point of initial shipment in 4Q13, which is an annual increase of 9.6%. Virtualisation licenses distributed this quarter grew year-over-year by 12.0% to 282,300, while EMEA virtualisation software revenue increased even more significantly by 14.2% to $456.3 million.
The EMEA server virtualisation market continues its gradual but slow shift towards the use of paid hypervisors, with paid virtualisation software now running on 83.0% of all new server hardware shipments virtualised in 4Q13 compared to 82.4% recorded in 4Q12.
For the full 2013, 2.2 million physical servers were shipped in EMEA, representing an annual decline of 2.7%. 717,000 virtualised servers and 1.0 million virtualisation software licenses were shipped, showing moderate to strong annual growth of 9.6% and 13.5%, respectively. Virtualisation software revenue reached $1.6 billion, which means an increase of 14.6% on the previous year.
"Although the server hardware market is stagnating, virtualisation efforts are continuing across our region," said Andreas Olah, research analyst, Enterprise Server Group, IDC EMEA. "Many smaller businesses have already embraced these technologies, and the virtualisation topic is maturing. This is evident from the fact that discussions in European organisations have moved on from initial approaches that focused mainly on hypervisor choice towards management and automation tools that let virtual machines move seamlessly between servers, and even between clouds in a hybrid model.
"The leading virtualisation vendors are aggressively pushing holistic stack approaches that include various tools and links to their own cloud offerings, such as VMware with its software-defined data centre model with vCloud Hybrid Service, and Microsoft's extensive Cloud OS framework. Although clients were initially overwhelmed by the complexity of these approaches, their value proposition is becoming better understood, which drives wider adoption of these types of holistic solutions."
Western Europe continues to lead the way in terms of wider adoption of server virtualisation technology, with 33.8% of new servers shipped in 4Q13 virtualised compared to 31.1% a year ago, though emerging regions are catching up rapidly.
Despite the overall uptrend, a slowdown in virtualisation growth is becoming apparent in Western Europe which is down to technology maturity and the disruptive nature of replacing or virtualising outdated legacy machines. Moreover, growth on the server hardware side is increasingly shifting toward datacenter expansion by the largest tier 1 cloud service providers that tend to run on non-virtualised gear. This is most apparent in the Nordics, Benelux, and Ireland, where virtualisation rates are below other mature markets in the region as a result.
Despite the 3.3% contraction in server shipments in 4Q13 compared with 4Q12, the emerging markets of Central and Eastern Europe, Middle East and Africa witnessed double-digit growth of 10.3% in virtual server unit shipments, year over year. This reflects growing maturity in virtualisation adoption, with the aim to consolidate the infrastructure by using fewer servers to deploy more virtual machines (VMs), and exploit existing hardware capacities to a greater extent.