Server Market Stabilizing Despite Declining Numbers: Gartner

By Jeffrey Burt  |  Posted 2009-11-30 Print this article Print

Server sales and revenues both declined in the third quarter when compared with last year, but jumped over the second quarter this year, a good sign that the market is stabilizing, according to Gartner. IBM continued to lead the market in revenue, while HP sold the most systems, thanks to its ProLiant line. Sun's numbers showed that it is still being hobbled by the delay in its acquisition by Oracle.

Server revenue and shipments in the third quarter showed steep declines over the same period in 2008, but it was the growth over the second quarter that caught the attention of Gartner analysts.

According to Gartner numbers released Nov. 30, server revenues in the third quarter were $10.7 billion, a 15.5 percent drop over the same period last year, while the 1.2 million servers shipped was 17.1 percent fewer than the third quarter in 2008.

However, compared with the second quarter this year, revenues grew 10.2 percent and shipments jumped 13.8 percent, which spells good news for the industry, according to the analyst firm.

"It is important to put the yearly declines into perspective," Gartner analyst Jeffrey Hewitt said in a statement. "[The sequential numbers suggest] that the market as a whole is showing signs of stabilization as we move toward the end of 2009."

IBM continued to lead the server market in revenue, with a 1.5 percent market share lead over Hewlett-Packard. All the top server vendors saw revenues decline over the third quarter in 2008, with Dell the only one not to have double-digit declines.

However, all but Sun Microsystems-which is still awaiting European regulators' approval to be acquired by Oracle-showed increases in revenue over the second quarter.

In shipments, HP again was the top vendor, with its market share hitting 32.1 percent in the third quarter. Dell was number two, followed by IBM, Fujitsu and Sun. Gartner analysts said HP's shipment numbers were driven mostly by sales of its ProLiant servers.

The latest generation of ProLiant servers-dubbed the G6 line-offer the newest Xeon processors from Intel and Advanced Micro Devices' six-core "Istanbul" Opteron chips, and also include other features designed make them better performing and more energy efficient than their predecessors.

As with the revenue numbers, all the top server vendors saw their shipments decline over the same period last year, but grown sequentially from the second quarter.


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