Server NewsWorldwide Server Hardware Shipments Up 23 Percent: Gartner

Worldwide Server Hardware Shipments Up 23 Percent: Gartner

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Server vendors have started off 2010 on a positive note by reversing a year of declining sales. First quarter worldwide server shipments jumped 23 percent while revenue increased just 6 percent according to IT research firm Gartner, thanks to price pressures keeping prices down.

After a year of free-falling, server hardware sales are finally starting to rebound. While the numbers are good now, the industry is coming off a drop in sales in previous quarters. Which parts of the server industry are headed in the right direction?

The growth, however, was one-sided. x86-based servers grew 25.3 percent in units and 32.1 percent in revenue, but RISC/Itanium Unix servers declined 28.5 percent in units and 26.9 percent in revenue, and the ‘other’ CPU category, which is mostly mainframes, fell 15.1 percent in revenue, according to Gartner.

“We’ve seen a return to growth on a worldwide level, but the market has not yet returned to the historical quarterly highs that were posted in 2008, and there were some interesting variations in that growth,” said Jeffrey Hewitt, research vice president at Gartner in a statement. “Emerging regions that were expected to grow, such as Asia/Pacific, forged ahead, while some mature markets, such as the U.S., produced better-than-expected results, as other countries and regions had a ‘mixed bag’ of results.”

The U.S., which analysts have long said is due for a hardware refresh, had the highest growth rate, up 28.6 percent year-over-year in the first quarter. Latin America had the highest vendor revenue growth at 27.9 percent for the period. All other regions had varying levels of shipment and revenue increases, but Japan saw a 0.7 percent revenue decline.

Among the top five worldwide vendors, there was a notable change. Sun Microsystems, now listed as Oracle (NASDAQ: ORCL), has swapped positions with Fujitsu, with Fujitsu in fourth place and Oracle now in fifth. While every other vendor grew by double digits, and Fujitsu’s main market is in its native Japan, Oracle fell 29.5 percent year-over-year for just 2 percent of the global market share in the first quarter of 2010, well behind Fujitsu’s 3.7 percent share.

HP (NYSE: HPQ) was once again the volume leader, selling 32.1 percent of all x86 servers, compared to 24.7 percent for Dell (NASDAQ: DELL) and 12 percent for IBM (NYSE: IBM). The percentages were roughly the same for revenues among the top three. Dell was the growth leader, up 33.5 percent year-over-year.

In its recent quarterly earnings report, Dell cited server sales as one of the catalysts for growth. Right behind it was Fujitsu, which has been making a push into the U.S. market as of late. It grew 33.3 percent year-over-year.

The RISC market was pretty much a losing proposition, with every major vendor involved losing ground. Oracle’s shipments were off 41.9 percent year over year, IBM was down 13.6 percent, HP off 20.7 percent and Fujitsu down 10.7 percent. Only France’s Groupe Bull showed a gain at 4.1 percent year-over-year growth, but Bull only has 0.4 percent market share among RISC vendors.

Andy Patrizio is a senior editor at, the news service of, the network for technology professionals.

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