Worldwide Server Market Growth Up 8.9 Percent for 2006

There were few surprises in the latest Gartner quarterly server market figures released Thursday. The market continues to grow at a healthy clip, with blade servers and x86 servers showing the greatest strength; RISC continues its decline, according to the 2006 worldwide server report.

Worldwide server shipments totaled 8.2 million units for the year, an 8.9 percent increase from the 7.5 million shipped in 2005. Once again, HP led the pack with 27.5 percent of the market, followed by Dell with 15.7 percent. Sun was a distant fourth with 4.5 percent of the market.

In terms of dollars, revenue in 2006 was $52.7 billion, up just 2 percent from $51.6 billion in 2005. Gartner attributed this to a slowdown in x86 server sales. "Most of that slowdown seems to be attributable to a lengthening of the sales cycle due to the anticipated introduction of quad-core x86 processors with some lesser impact from x86 server virtualization," said Jeffrey Hewitt, research vice president at Gartner, in a statement.

IBM continued to lead in terms of dollars, with $16.9 billion in sales and 32.1 percent of the total revenue pie, due to to growth across the board but especially in its System Z and zSeries mainframes, which were up 10.3 percent in 2006.

"Mainframes were the fastest growing segment of the server market in 2006, which shows just how relevant these systems are to customers today," said Bob Hoey, vice president IBM System z, in a statement. "This growth can be attributed to the launch of the System z Business Class mainframe during the year, as well a $100 million investment to simplify the platform and the uptake of workloads driven by the launch of specialty processors for Linux and Java."

Although Sun's market share was flat, it did see a nice bounce in revenue, reversing a yearly decline that had been going on since 2001. Sun's revenue jumped 15.4 percent, to $5.7 billion. By contrast, IBM was up only 1.7 percent compared to 2005 sales; Dell's revenue was essentially flat at 0.4 percent growth, and HP fell 2.3 percent.

Naturally, Sun is pleased. "We have the best server line-up in our history, an unmatched asset in Solaris 10, and a sales force that is working closely with customers who believe network computing delivers a competitive advantage. We're happy with the progress we've made over the past year, but plan to keep working hard to build on our success," John Fowler, executive vice president of Systems at Sun, said in an publicly released statement.

HP was the overall unit leader, with 27.5 percent of the market and the top x86 server vendor, with 28.5 percent of the market. Sun lead in the RISC/Itanium Unix market with 54.1 percent. However, the RISC/Itanium market was down 1.6 percent in unit sales compared to 2005. HP's percentage of the RISC market was down 10.1 percent, which is attributable to its transition off of its PA-RISC architecture.

Sun's x86 sales aren't high enough to be broken out separately in the report, though as a relative newcomer it's made rapid gains. Sun began selling AMD Opteron servers in 2005, and it will begin selling Intel Xeon-based servers this year.

Of the top 10 vendors in server shipments worldwide, Rackable Systems had the highest growth, with a 68 percent increase for the year. Blade servers continue to be a high-growth market for everyone in that business, up 36.5 percent in 2006. IBM rules that roost with a 41.1 percent revenue share, while HP is catching up, with a 32.5 percent share.

This article was originally published on internetnmews.com.