IBM, Sun Clamor for Unix Lead

By Sean Michael Kerner (Send Email)
Posted Aug 26, 2005

Who is the leader in Unix operating system revenue?

The latest server stats show change is afoot in the Unix server pack. Who will be the top dog?

If you're basing the answer on Gartner Dataquest's not yet officially released second quarter 2005 Worldwide Server Database, stats, the answer is up for grabs.

Ask IBM, and you'll hear the vendor take credit for Unix's rebounding growth.

IBM claimed in a press release issued earlier this week that it grew Unix revenue year over year the most, whereas rival Sun Microsystems lost share year over year.

Sun, however, issued its own press release, claiming it is the No. 1 Unix server vendor worldwide, in both revenue and unit shipments.

It turns out they are both right.

Gartner's data reveals that IBM did increase its Unix revenues on a year-over-year basis by nearly 33 percent. In comparison, Sun Microsystems had a negative 7 percent growth on a year-over-year basis.

However, despite the year-over-year growth figures, Sun came out on top as the No. 1 Unix vendor, by revenue, with a 38 percent market share. HP ranked in second place, at 29 percent, and IBM in third, at 23 percent.

Sun also topped the list of Unix vendors by shipments with a 57 percent market share and growth of 11 percent on a quarter-to-quarter basis, but a decline of 4 percent on a year-over-year basis. IBM came in second with a 20 percent market share of shipments, which was a quarterly decline of 7 percent. However, it was still up 10 percent on a year-over-year basis.

The research firm measured total growth in Unix server revenue at 6.6 percent and said the Unix space accounts for approximately one-third of the total server market.

IDC Paints a Clearer Picture

IDC also released its server stats this week.

The firm named IBM as the market leader in worldwide Unix server revenue, with a 31 percent share. It found HP and Sun tied for the No. 2 position, with 30.0 percent and 29.5 percent share, respectively.

IDC noted a resurgent interest in Unix servers in 2Q05. Total worldwide Unix revenue measured in at $4.3 billion for the quarter. This is an increase in revenue of 2.5 percent year over year, although unit shipments declined 8.7 percent compared with 2Q04.

The increase reflects sales of "richer configurations in the midrange enterprise and high-end enterprise categories" — i.e., less of more. High-end Unix servers saw 19.2 percent growth in factory revenue, year over year. Midrange servers saw 15.6 percent growth, year over year. And volume Unix servers declined 19 percent year over year.

Vendor Face Off

Mark Richardson, a Sun spokesperson, explained that Sun's year comparisons are low because the vendor had a particularly strong year in 2004, fueled by Sun's own UltraSPARC IV systems ramping up.

"We are extremely pleased that we have a leadership position in Unix," Richardson said. "We have a strong product lineup with SPARC and x64 systems, and we should return to revenue growth and revenue share growth."

Sun claimed its x86-64 platform server revenue was up by 379 percent on a year-to-year basis, and shipments were up by 275 percent by the same measure.

IBM, however, has a somewhat different view of the Unix landscape.

"Our revenues continue to grow. We've grown 11 out of the last 12 quarters and we don't see anything that's fundamentally changing," said Karl Freund, vice president of pSeries products for IBM's Systems and Technology Group.

"We grew 36 percent in the second quarter; they grew low single digits. That would tell us whether they are No. 1 or not, they certainly aren't going to stay No. 1."

According to Gartner, IBM holds the top spot overall in terms of vendor server revenues with a 30 percent share. HP came in second with 27 percent; Sun was a distant third with 13 percent and Dell fourth with 10 percent.

In terms of operating system share as a percentage of the overall market, Windows, although under pressure from Unix and Linux, continues to grow. Windows is again the leading operating system by revenue with a 34.42 percent market share, according to Gartner. That translates to a year-over-year growth rate of 7.8 percent.

Unix revenue market share for 2Q05 ranked at 33.84 percent, which represents growth of 6.6 percent. Linux represented a scant 10 percent of revenue, although it is growing at the fastest rate: 32 percent year over year.

Freund points out that Unix's growth is all coming from IBM.

"If you took us out of the Unix market you'd actually see a shrinking Unix market, or flat, as Gartner calls it," Freund said.

Amy Newman contributed to this article.

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