Gartner Reports Server Sales Up 17 Percent

By Stuart J. Johnston (Send Email)
Posted Feb 25, 2011


Global server sales jumped 16.8 percent in terms of shipments last year while, in terms of revenue, they grew 13.2 percent, according to Gartner, a leading analysis firm. It may not be time to sing ‘happy days are here again’ quite yet, but server sales were up significantly in 2010, the analyst firm reports.

For the fourth quarter alone, server shipments grew 6.5 percent while revenue surged 16.4 percent, according to a report released late this week.

All told, server vendors shipped 8.84 million units in 2010 worth a total of $48.79 billion.

One key factor behin the improved numbers is that current budgets that are enabling IT managers to start acquiring servers and other infrastructure that had been deferred in recent budget cycles.

"2010 was a year that saw pent-up x86-based server demand produce some significant growth on a worldwide level," Jeffrey Hewitt, research vice president at Gartner, said in the report.

"The introduction of new processors from Intel (NASDAQ: INTC) and AMD (NYSE: AMD) toward the end of 2009 helped fuel a pretty significant replacement cycle of servers that had been maintained in place during the economic downturn in 2009," he added.

HP (NYSE: HPQ) retained its title as the largest server OEM in terms of units shipped with a market share of 31.7 percent, a gain of 0.2 percentage points from 2009.

In second place, the story was much the same for Dell (NASDAQ: DELL), which picked up 0.8 percentage points to end the year with an overall share of units shipped of 23.4 percent. HP shipped 2.8 million servers, while Dell shipped 2.1 million.

Bringing up third place, IBM's (NYSE: IBM) 2010 market share of 13.1 percent of units shipped slightly declined from 13.5 percent in 2009. In fact, IBM shipped only 1.16 million servers but, since those number include mainframes, the revenue generated by them put Big Blue solidly in first place for the quarter, and it it second place for the entire year.

For the year, IBM's server sales brought in $15.05 billion, behind only HP with $15.33 billion while, for the fourth quarter of 2010, IBM's servers grossed $5.23 billion, out pacing HP's $4.46 billion.

"The introduction of new mainframe platforms from IBM helped to drive increases in the mainframe segment with 68.3 percent revenue growth of IBM's System Z platforms in the fourth quarter," Hewitt said.

Oracle and Fujitsu were in the same boat with IBM, selling fewer, though more expensive, servers. For instance, Oracle came in with only 162,340 servers for a total market share of 1.8 percent, but it brought in 3.1 billion. Additionally, Fujitsu shipped 289,782 servers, a mere 3.3 percent of shipped servers, but those brought in a total of $2.1 billion in revenue.

"The outlook for 2011 suggests that growth will continue, but at lower levels, because the highest level of the replacement cycle for x86 servers was probably reached in 2010," Hewitt added.

Stuart J. Johnston is a contributing writer at InternetNews.com, the news service of Internet.com, the network for technology professionals. Follow him on Twitter @stuartj1000.

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