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IBM is back the biggest server vendor

Posted on Saturday, August 27 2005 @ 10:15:19 CEST by

According to IDC's Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market grew at 5.6% year over year to $12.2 billion in the second quarter of 2005, marking the ninth consecutive quarter of positive overall revenue growth.

Volume server revenue grew 11.1% year over year and continues to represent the primary growth engine for the server market overall. Revenue for midrange enterprise servers grew 4.3% year over year, marking the second consecutive quarterly increase in that segment. However, the high-end enterprise server market, which grew from 4Q03 through 3Q04, declined 3.0% year over year, its third consecutive quarter of reduced spending.

While the high-end enterprise server market dipped, sales of high-end Unix servers grew, demonstrating their resilience in the corporate data center as platforms for mission-critical workloads and workload consolidation. "IT acquisition patterns are changing, and we are seeing the product mix of server investments change over time," said Matt Eastwood, program vice president of Worldwide Server Research at IDC. "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."

Top Server Market Findings :
  • Year-over-year unit shipment growth of 10.9% - the lowest unit growth in more than two years - reflects moderating unit growth in the volume server segment, more difficult compares, and a shifting product mix.
  • Linux servers posted their 12th consecutive quarter of double-digit growth, with year-over-year revenue growth of 45.1% and unit shipments up 32.1%. Customers continue to expand the role of Linux servers into an ever increasing array of workloads in both the commercial and technical segments of the market.
  • Microsoft Windows servers showed strong growth, as revenues grew 14.3% and unit shipments grew 10.9% year over year. Significantly, quarterly revenue of $4.1 billion for Windows servers represented 33.5% of overall quarterly factory revenue, as customers deploy more fully configured Windows servers for server virtualization initiatives.
  • Unix servers experienced 2.5% revenue growth year over year; however, unit shipments declined 8.7% when compared with 1Q04. Worldwide Unix revenues of $4.3 billion for the quarter reflect continued IT investment in this server market segment with particular strength in the high-end of the market.
  • Overall Server Market Standings, by Vendor
  • IBM maintains the number 1 spot in the worldwide server systems market with 31.9% market share in factory revenue, growing its revenue by 4.1% when compared to 2Q04. HP continued to hold the number 2 spot in terms of factory revenue with 28.5% share, growing revenue 11.5% compared to 2Q04.
  • In terms of unit shipments, HP maintained the number 1 vendor worldwide with 29.6% server shipment share growing 6.4% year over year. Dell maintained the number 2 spot in terms of worldwide server shipments with 25.3% share, growing shipments 25.0% compared to 2Q04.
  • Dell and Sun tied for third place in factory revenue with 11.3% and 10.5% share respectively. This is the fourth consecutive quarter that Dell and Sun have been within one point of market share as Dell experienced 22.3% year-over-year revenue growth while Sun's revenues declined 5.3% when compared to 2Q04.
  • x86 Industry Standard Server Market Dynamics
    End-user demand for x86 servers continued to be strong, with growth actually accelerating when compared with 2Q04. Factory revenue grew 15.1% to $5.7 billion worldwide, while unit shipments grew 13.0% to more than 1.5 million servers worldwide. Dell, HP, and Sun all outpaced the category's growth rate, posting year-over-year revenue growth in excess of 17%. The second quarter saw a continuation of spending for x86-64 servers which now account for more than 60% of all x86 server spending. "We're just seeing the beginning of dual-core shipments in the x86-64 server market," said Kelly Quinn, senior research analyst in IDC's Enterprise Server Group, noting that volume shipments will likely begin in 3Q05. "Overall, the volume ramp of x86-64 servers was extremely strong with 30.4% sequential quarterly revenue growth, as the transformation from a 32-bit-only x86 servers market to a 64-bit enabled market is well underway. However, IDC notes that 32-bit applications will continue to run on these x86-64 platforms for many years to come."

    Linux Servers Surpass the $1 Billion Mark in Revenue for the Third Consecutive Quarter
    Linux server revenue exceeded $1.4 billion in quarterly factory revenue in 2Q05 as Linux server revenues showed 45.1% growth, the fastest rate of growth since 2Q04. Linux servers represented 11.5% of overall quarterly server revenue - reaching an all-time high - as Linux servers continue to expand their presence in data centers around the world for an increasing variety of workloads. HP maintained its number 1 spot in the Linux server market, with 24.3% market share in terms of revenue, while IBM was second with 20.3%.

    Unix Servers and Windows Servers Both Grow Revenue, Topping $4 Billion
    Unix servers saw a resurgence in IT investment during 2Q05, with $4.3 billion in factory revenue, up nearly 3% from the previous sequential quarter, reflecting sales of richer configurations in the midrange enterprise and high-end enterprise categories. High-end Unix servers saw 19.2% growth in factory revenue, year over year, while midrange servers saw 15.6% growth year over year and volume Unix servers declined 19% year over year. "Unix servers continue to support mission-critical workloads, and IT managers are expanded capacity by investing in more scalable servers in Q2," said Jean S. Bozman, vice president of IDC's Enterprise Server Group. IBM was the leader in worldwide Unix server revenue with 31% share, while HP and Sun were statistically tied for the number two position, with 30.0% and 29.5% share, respectively.

    Windows servers continued double-digit growth, with factory revenue increasing 14.5% year over year to $4.1 billion worldwide. Top vendors in this category included HP with 38.2% market share, Dell with 22.9% share, and IBM with 17.5% share. "Windows server growth outpaced the overall server market growth this quarter, increasing from 30.9% of quarterly server revenue in 2Q04 to 33.5% in 2Q05," Bozman said.

    Bladed Server Market Shows Strong Shipment and Revenue Growth
    The server blade market showed continued growth in the quarter, with shipments increasing by 67.1% year over year and factory revenue gaining 87.9% year over year. Overall, bladed servers, including both x86 and RISC blades, accounted for $440 million in the second quarter, representing 3.6% of quarterly server market revenue. RISC blades generated less than 5% of factory revenue. IBM maintained the number 1 spot in the server blade market, with 40.9% market share, while HP maintained the number 2 position with 38.6% share. Dell's share of the blade market decreased to 6.5% in 2Q05.



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