HP, IBM Each Claim Top Spot in First Quarter Server Study
Gartner this week released server and revenue stats showing a strong first quarter from both a shipment and revenue perspective. More than 1.5 million systems were sold, generating $11.8 billion in revenue. Year-over-year, the number of servers shipped increased 27.1 percent, while quarter-over-quarter, the volume decreased 3.4 percent. From a revenue perspective, year-to-year growth was 9.3 percent and quarter-to-quarter growth declined 12.3 percent.HP and IBM are each claiming the title of top server vendor for first quarter. HP led the charge for volume, while Big Blue brought in the most revenue. Entry servers and mainframes both won big this quarter, as did servers running Linux.
The contrast between quarter-to-quarter growth and year-to-year growth was not surprising, given the record fourth quarter that was had in 2003 and the traditional sluggishness typical of first quarter sales, Gartner Analyst Michael McLaughlin told ServerWatch.
HP and IBM are each claiming top spot for the quarter. HP led the charge for volume, while Big Blue brought in the most revenue. Entry servers and mainframes, the two ends of the computing spectrum, also won big this quarter. Linux servers made tremendous gains as well.
HP shipped 431,231 new servers in the first quarter of 2004. This is an increase of 20.6 percent over the number of units that shipped in first quarter of 2003, but a decline of 6.9 percent compared to the fourth quarter. Dell came in second, with 343,625 systems shipping. It saw the most year-to-year growth (38.4 percent)as well as the most quarter-to-quarter growth (7.9 percent). IBM took the No. 3 slot with 231,949 systems shipping. Sun Microsystems and Fujitsu rounded out the top five, having shipped 76,791 and 58,287 systems, respectively.
The revenue numbers paint a different picture. Here, HP and IBM swapped spots, with IBM bringing in $3.6 billion in revenue nearly one third of total server revenue for the quarter. This was 16.7 percent more than it brought in during the first quarter of 2003, yet 25.2 percent less than the fourth quarter of 2003. HP came in second, with revenue slightly more than $3 billion. This represents a year-to-year increase of 6.2 percent and a quarter-to-quarter decline of 14 percent. Sun, Dell, and Fujitsu took spots three through five with revenue of $1.2 billion, $1.1 billion, and $842 million, respectively. Dell had a 24.8 percent increase in year-to-year revenue, the largest of any of the vendors. Fujitsu had the greatest quarter-to-quarter increase 24.6 percent.
McLaughlin noted that Fujitsu's strong performance is a result of the vendor's concentrated focus in each region of the world.
In terms of system size, low-end servers led the charge for growth in both revenue and profitability: Nearly 1.3 million systems priced below $5,000 shipped, generating $3.5 billion in revenue. This is a year-to-year revenue increase of 34.4 percent and an increase in volume of 33.9 percent. Quarter-to-quarter growth was -0.7 for revenue and -2.4 percent for volume. Mainframes also did well. Although only 1,518 units shipped, they generated nearly $1.8 billion in revenue 12.9 percent more than was generated in the first quarter of 2003, and 24.6 percent more units than shipped in that quarter. When compared to the fourth quarter, the picture isn't as rosy. The number of units that shipped was 6.6 percent less, and revenue declined 23.5 percent.
When sliced and diced by operating system, Windows again took the largest share, but Linux saw the most growth in terms of both revenue and volume from a year-to-year perspective. Year-to-year, Unix-based servers increased volume but not in revenue, with Sun again taking the top spot for volume and revenue.
Linux again saw explosive growth, with more than 1 million servers shipping, bearing out a 69.7 percent increase in year-to-year growth and 2 percent in quarter-to-quarter growth. HP shipped the most boxes (56,753), but IBM brought in the the most revenue (nearly $286.7 million). Despite the rapid increase in Linux sales, however, its revenue accounted for only 8.7 percent of the pie and about 14.7 percent of all systems that shipped.
McLaughlin doesn't believe the pending SCO lawsuits and general fear, uncertainty, and doubt will have a tremendous impact on Linux adoption in the long term. He did note, however, that 25 percent to 30 percent of enterprises are delaying or slowing down their Linux migrations plans.