Consolidation and business demands drive lackluster revenue numbers for the second consecutive quarter, say Gartner and IDC.
The first quarter was a slow one for the global server market, with shipments rising modestly but revenue remaining relatively flat, according to two analyst companies.
Both IDC and Gartner pointed to the push by companies to align their IT infrastructure with their business demands, including consolidating resources in their data centers in an effort to save money.
The analyst companies both agreed that the strongest segment of the server market is in the volume x86 space, though even that segment saw only modest growth.
In both surveys, the RISC/Unix market saw declines in both shipments and revenue over the same period last year.
"Overall, the market was pretty lackluster," said IDC analyst Kelly Quinn, in Framingham, Mass. After 10 consecutive quarters of rising revenue, "this was the second [consecutive] quarter of decrease in overall revenue."
According to IDC, worldwide shipments grew 9.5 percent, while revenue declined 1.9 percent, to $11.9 billion. The low-end volume x86 segment saw revenue growth of 6.3 percentthe slowest growth in more than three yearswhile the midrange segment saw a 16.2 percent drop in revenue. The high-end market saw revenues drop 3.2 percent.
Other significant numbers included Windows server revenue jumping 5.9 percent, to $4.4 billion, and shipments increasing 12.9 percent, driven by customer use of the systems in scalable environments and consolidation projects. Linux systems also saw strong growth of 17 percent in revenue and 14.4 percent in shipments.
Unix servers dropped 7.1 percent in revenue and 8.7 percent in shipments, while Itanium-based server revenue grew 41.8 percent, to $640 million, which represents 11.2 percent of all non-x86 revenue. Itanium vendors are preparing a new round of systems, with the anticipated release of the dual-core "Montecito" chip from Intel later this year.
Gartner, of Stamford, Conn., saw similar numbers. The company said worldwide revenue totaled $12.35 billion, compared with $12.34 billion in the first quarter last year. Shipments hit 2 million, up from 1.7 million.
"The x86 server portion of the market continues to be the strongest segment," analyst Jeffrey Hewitt said in a prepared statement. "X86 servers remain as the leading server choice for meeting ongoing Web-related growth while other segments have started the year in a less-positive mode."
Both Intel and Advanced Micro Devices are preparing a new round of chips coming into this space, promising greater energy efficiency and better performance, thanks to such features as hardware-based virtualization.
IDC also showed a continued strength in the blade server space, with revenue growing 43.4 percent and shipments jumping 29.5 percent. The $591 million in revenue represented 5 percent of the overall server market, with IBM and Hewlett-Packard the top two blade vendors, with 40.1 percent and 35.6 percent, respectively. Dell was third, with 11.1 percent.
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Both analyst companies had IBM and HP as the top vendors in overall revenue. IDC pegged HP as No. 1, with more then $3.33 billion in revenue for 28.1 percent market share, followed by IBM, with $3.3 billion, or 27.9 percent. Gartner had IBM in the top spot, with $3.5 billion, for 28.6 percent market share, and HP, at $3.4 billion, or 28 percent.
Both had Dell, Sun Microsystems and Fujitsu/Fujitsu Siemens rounding out the top five. However, in both surveys, only Sun experienced significant growth, driven by a revamped server line that includes x86 systems powered by AMDs Opteron processor and new systems running on its own multicore UltraSPARC T1 "Niagara" chip.
"That helped generate a lot of interest in what theyre doing," IDCs Quinn said. It also probably helped sales of their traditional SPARC/Solaris systems, she said.
Gartner had Dell with a 2 percent drop in revenue, while IDC said it gained 3.6 percent.
Dell could see its fortunes bolstered by this time next year. The Round Rock, Texas, company last week announced that it was going to sell Opteron-based servers, starting in the four-socket space, later this year. According to IDC, AMD-based systems have a high attach rate in that space, and this was the first time those servers topped the $1 billion mark for a quarter.
HP is the top seller of AMD-based servers, with almost 20 percent of its server revenues coming from those systems, IDC said.
Gartner said HP was the top vendor in shipments, with 538,201 units, or 27.1 percent market share. Dell was second, at 21.7 percent, followed by IBM, Sun and Fujitsu.
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