IBM, HP Continue to Lead Tough Server Market, Gartner Says

 
 
By Jeffrey Burt  |  Posted 2009-09-02 Print this article Print
 
 
 
 
 
 
 

IBM and HP-like every other major OEM-saw their server revenue and shipment numbers fall sharply in the second quarter, according to analyst firm Gartner. The historically bad quarter was driven by the freeze in IT budgets as businesses battled the global recession. Still, Gartner analysts are predicting some growth in the market for 2010.

The worldwide server market continued to decline in the second quarter as the IT industry struggled with the effects of the global recession, according research firm Gartner.

The quarterly report by the Gartner analysts issued Sept. 2 echoed what their counterparts at IDC found in a similar study published earlier in the day: that businesses kept a tight hold on their IT budgets, opting to extend the lives of their aging servers rather than refresh them with new systems.

Overall, global server shipments fell 28 percent over the same period last year, while revenue dropped 29.4 percent, according to Gartner's numbers.

"The server market remains constrained on a worldwide level," Gartner analyst Jeffrey Hewitt said in a statement. "Server sales have felt the impact of reduced budgets since the last half of 2008 and the second quarter of this year remained in the negative."

No server segment or global region was spared, Hewitt said. Taking the lightest hit was x86 blade servers, which saw unit shipments fall 23.6 percent and revenues drop 13.6 percent.

Within this harsh environment, IBM and Hewlett-Packard continued to lead the pack, though they, too, saw their shipment and revenue numbers plummet.

IBM was still the top revenue generator, pulling in more than $3.1 billion in the quarter for a 32.5 percent share. Still, that was a 27.1 percent drop in revenue over the same quarter in 2008. HP, Dell, Sun Microsystems and Fujitsu/Fujitsu Siemens rounded out the top five.

In units shipped, HP was the No. 1 vendor, selling 522,447 servers for a 31 percent market share. However, that was a 26.1 percent drop over the same period last year.

Dell was the second top server shipment vendor, followed by IBM, Sun and Fujitsu.

In a video, Gartner analyst Errol Rasit said that although the second quarter was the worst the firm had recorded for servers in terms of revenue and shipments, the market began to take on normal seasonal trends, which bodes well for the rest of the year and into 2010.

However, it will take time for companies to begin thawing out their IT budgets, and that's combined with an expected shift in how businesses view their IT infrastructure, particularly servers, Rasit said. They want it to be more cost-effective and easier to manage, and they're turning their attention more to technologies such as server virtualization. Gartner is predicting 2 percent growth in server shipments for 2010, he said.

Still, there is some interesting developments in the server space, Rasit said, in particular Cisco Systems' entrance with its UCS (Unified Computing System) offering and Oracle's impending acquisition of Sun for $7.4 billion.

"So, two very large organizations entering into what is a fairly consolidated market looks to be some exciting developments," he said.


 
 
 
 
 
 
 
 
 
 
 

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