GuidesIBM, HP Lead Q2 Server Sales, but Sun's Rising

IBM, HP Lead Q2 Server Sales, but Sun’s Rising

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Who’s number one in servers? Depending on how you slice the data, IBM, or HP, with Sun on a growth spurt in number three.
IDC’s second quarter report shows the usual suspects leading the pack with Sun gaining. Volume servers still the worldwide favorite.

IDC’s second quarter stats on worldwide server share showed that IBM held the top spot in vendor share of the overall server market with 31 percent in factory revenue. However, it did slide by 2.2 percent year-over-year in the second quarter.

HP held on to the second spot in IDC’s stats on factory revenue with 27.8 percent, down year-over-year by 1.7.

But the breakout story is Sun , which surged in the second quarter with 15.5 percent year-over-year revenue growth in the second quarter to bring its share to 12.9 percent from 11.2 percent in the same time last year. Sun’s UltraSPARC-based systems were the spark, but IDC also said growth in systems with AMD’s Opteron-based products also had a positive impact.

Dell slipped in the number 4 position with 10.3 revenue-based market share, down by 1.3 percent. Fujitsu/Fujitsu-Siemens maintained its number 5 standing in terms of factory revenue, with 4.5 percent market share in the quarter.

In unit shipments, however, HP took the top ranking among vendors worldwide with 30.5 percent of the server shipment market, up 12 percent year over year. The number 2 slot belonged to Dell with a 23.8 percent chunk, up 2.2 percent from a year ago.

“Average sales values are under intense price pressure as workloads are consolidated on small form-factors and as server vendors compete intensely on volume server platforms that are the key building-blocks for scale-out deployments.”

—Jean Bozman, research vice president, IDC

Volume shipments and the x86 server market stayed positive in the quarter, but just weren’t as hot at 3.3 percent growth. Still, for a segment that commands a $5.9 billion market worldwide, the slowest growth rate in eleven quarters can’t hurt all that much.

IDC said unit shipment growth on x86 systems saw a moderate gain of 9.8 percent to 1.68 million servers as customers continued to consolidate their IT infrastructures. Stats like those helped IBM, HP and Sun post positive year-over-year revenue growth in the x86 server market.

But HP and Sun were the only top 5 server vendors to outgrow the market in the quarter with factory revenue up 3.6 percent and 48 percent respectively. They scooped up x86 market share in the process. Still, look for virtualization technologies and dual-core introductions in the x86 server space to moderate that growth somewhat, IDC said.

The usual suspects continued their growth and slides too. Unix servers saw a 1.6 percent revenue decline thanks to fewer unit shipments, but overall, worldwide Unix revenues command a major chunk of IT spending at $4.3 billion for the quarter, representing 35 percent of quarterly server spending. This was particularly true in the volume segment of the Unix market. But Microsoft continued chipping away at that share.

Windows servers saw revenue growth of 3.1 percent and unit shipments up 11 percent from the same time last year. Quarterly revenue of $4.2 billion for Windows servers represented 34.2 percent of overall quarterly factory revenue, IDC said, as customers deploy more fully configured Windows servers as part of server consolidation and virtualization initiatives.

EPIC or Itanium-based systems were ripe with 36.4 percent year over year growth, which adds up to about 11.7 percent of all non-x86 server revenue. AMD’s Opteron processor continued to shine in the x86 market segment with 20.2 percent of all worldwide x86 server revenue for the first time in 2Q06, IDC said.

So although Linux servers and Windows servers continued to grow unit shipments at double-digit rates, revenue growth for both types of servers leveled off to single-digit growth, according to Jean Bozman, research vice president for IDC’s worldwide server research division.

“This shows that average sales values (ASVs) are under intense price pressure as workloads are consolidated on small form-factors and as server vendors compete intensely on volume server platforms that are the key building-blocks for scale-out deployments.”

Overall, added Matt Eastwood, program vice president of IDC’s worldwide server research division, technology innovation continues to influence server deployment decisions and drive changes in acquisition patterns across the industry.

“Enterprises continue to deploy both scale-up and scale-out server configurations as part of their core IT strategy. As evidence of this trend, 1-socket and 32-socket+ configurations grew sharply in the second quarter while all other configurations experienced a year-over-year revenue decline as multi-core processors enable 1-socket systems to cannibalize workload from traditional 2-socket systems.”

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