IDC: IBM Still Drives Steady Server Market

By Clint Boulton (Send Email)
Posted Aug 29, 2005


Interest in newer server offerings is stimulating growth in server sales, which grew 5.6 percent year over year to $12.2 billion in the second quarter of 2005. IBM continues to prop up a server market buoyed by strong volume and midrange machine sales

IBM again lead the pack, with 31.9 percent of the market in the second quarter. While Big Blue grew its server sales 4.1 percent from the same period in 2004, HP grew more: 11.5 percent from the year-ago period, good for the No. 2 position and 28.5 percent of the market.

HP, which is climbing its way back into the server race under new leadership after a sub par 2004, continued to ship the most servers, 29.6 percent.

Dell and Sun again tied for third place in revenue with 11.3 percent and 10.5 percent, respectively. Dell grew 22.3 percent while Sun's revenues declined 5.3 percent from the second quarter of 2004. Dell also maintained the No. 2 spot in terms of server shipments with 25.3 percent, growing 25 percent from the same period a year ago.

Sales of volume servers, low-cost machines using one to two processors, grew 11.1 percent compared to last year, pacing the market. Midrange server sales grew 4.3 percent year over year.

Customers continue to be turned off by large systems because of their cost, as the high-end server market declined 3 percent year over year. That trend doesn't apply to high-end Unix servers, which grew sales 19.2 percent in spite of the buying patterns. Unix server revenues totaled $4.3 billion for the quarter.

Matt Eastwood, vice president of server research at IDC, summed up the current computing market: "Strength in midrange servers and Unix high-end servers shows that customers are balancing their scale-out volume server deployments with scale-up servers to handle business-processing workloads."

While volume and midrange business servers continue to carry the load, dual-core machines, Linux servers and blade servers are stimulating interest in the market.

Fueled by the demand for new 64-bit, dual-core systems, x86 server sales grew 15.1 percent to $5.7 billion worldwide. Dell, HP, and Sun outpaced the category's growth rate, with 17 percent. x86-64 servers now account for more than 60 percent of all x86 sales, IDC said.

Systems based on the Linux operating system and Microsoft's Windows OS continued to sell at a high rate. Sales of Linux machines grew 45.1 percent from the second quarter of 2004, making of up 32.1 percent of servers shipped.

Windows servers sales grew 14.3 percent and unit shipments grew 10.9 percent. The quarterly revenue of $4.1 billion for Windows servers represented 33.5 percent of overall quarterly factory revenue.

The market for modular blade servers continued to expand in the second quarter, with shipments increasing by 67.1 percent year over year. Bladed servers reaped $440 million for the quarter. IBM remained the top blade seller, with 41 percent market share. HP was second at 38.6 percent.

This article was originally published on internetnews.com.

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