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IBM Holds Server Sale Lead

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IBM is wresting market share from rivals in the server sector with 31.7 percent of factory revenues worldwide on sales of $3.6 billion in the third quarter.
Server vendors have reason to cheer this holiday season. Total system sales and shipments are up nearly 20 percent.

According to IDC, HP came in second during the same time with a 26.8 percent market share on $3.1 billion in sales.

Sun and Dell were next with 10.2 percent and 10.1 percent shares, respectively.

Total server sales grew 18.2 percent, almost mirroring the 18.7 year-over-year growth in server shipments.

Dell posted the most revenue growth from third-quarter 2003 to thrid-quarter 2004, at 14.1
percent; HP was No. 1 in units shipped.

Overall, IDC said server revenues worldwide grew 5.5 percent from the year-ago period to $11.5 billion, marking the sixth quarter in a row of positive revenue growth in the sector.

Total server sales grew 18.2 percent, almost mirroring the 18.7 year-over-year growth in server shipments.

The Framingham, Mass., research outfit attributed the growth to enterprise clients refreshing their IT equipment.

Led by IBM and Dell, the market for x86 servers running Microsoft Windows grew 13.3 percent and unit shipments grew 19.1 percent. IDC said quarterly revenue for Windows machines topped $3.9 billion, or 34 percent, nearly equal in size to the $4 billion Unix market.

The third quarter was also the first quarter where sales of x86-64 servers began to take off. IDC analyst John Humphreys attributed 64-way system success to the introduction of the Intel Xeon EM64T processor, triggering 60,000 unit shipments worldwide.

Meanwhile, Humphreys said AMD’s Opteron grew volumes greater than 400
percent from the same period last year. While 64-way systems based on chips from fierce rivals Intel and AMD sold well, Humphreys noted a difference between where the warring chip architectures were finding placement.

“Opteron is largely selling into corporate, government and industrial market segments with a need for high-performance systems — hence over 60 percent of AMD’s volumes are tied to Linux server deployments,” Humphreys said. “Conversely, EM64T is shipping overwhelmingly with Windows and is being deployed largely in existing 32-bit environments.”

Linux server sales continued their volcanic growth, ballooning 42.6 percent with unit shipments up 31.7 percent year-over-year. Linux server revenue also shot past $1 billion in quarterly factory revenue for the first time in the third quarter.

HP held fast as the No. 1 Linux server vendor, with 26.9 percent. IBM was second with 20.5 percent, and Dell held the third spot with 17.4 percent.

Big Blue continued to be first in blade server sales, with 44.2 percent, mirroring a 44 percent year-over-year growth. Blade servers accounted for $287 million in the third quarter.

IDC spotted a trend shift in blade servers. It said the industry has moved away from single-processor blades to dual- and four-processor machines to handle more advanced computing workloads.

IDC forecasts that blade server sales will top $1 billion in 2004 on the strength of Dell’s new blade offerings and interest from small and medium-sized businesses.

This article was originally published on

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