Sun Burns Brightest in Latest IDC Server Study

 
 
By Scott Ferguson  |  Posted 2007-02-26 Email Print this article Print
 
 
 
 
 
 
 

In the last quarter of 2006, Sun's server revenue grew nearly 15 percent, while Hewlett-Packard took the top blade vendor spot from its longtime rival IBM, according to a study by IDC.

In a year of comebacks for once-struggling Sun Microsystems, the companys server revenue grew 15 percent in 2006, which jolted the company into a tie for third place among the top five vendors, according to the latest IDC study. The survey, which IDC released on Feb. 26, showed Sun increasing its server revenue 24.4 percent in the fourth quarter of 2006 compared with the same time the previous year. That quarter helped Sun collect $5.6 billion in server revenue for the whole year, which represented 10.8 percent of the marketplace. In addition, the IDC report showed that Hewlett-Packard overtook IBM for the No. 1 spot in the blade market during the fourth quarter of 2006. However, for the year, IBM remained in the top spot with 40 percent of the blade markets revenue compared with 37.4 percent for HP.
For the whole year, server revenue grew 2 percent to $52.3 billion, while shipments increased 5.9 percent to a total of 7.5 million units. In just the fourth quarter, revenue increased 5.2 percent but shipments were flat.
Jed Scaramella, an analyst with IDC, said a closer look at the numbers showed that volume server system shipments grew only 2.1 percent in the fourth quarter, but sales of midrange and high-end server sales increased 5.4 and 11.5 percent respectively. This trend seems to show that enterprises are no longer just looking at the server with the lowest price. IT departments are more concerned about how the purchase of each server fits into costs associated with the data center, the ability to deploy virtualization software on that system and what range of services vendors can provide for the hardware.
"More customers are concerned about the total cost of ownership," Scaramella said. "The vendors out there that are doing well are the ones that can offer a total integrated solution, and we saw that trend in the last half of 2006 and I think well see it continuing into the next couple of quarters." The companies that are able to deliver those solutions, such as HP, Sun and IBM, were able to show growth in both the fourth quarter and for the 2006 as a whole, according to IDC. The numbers from IDC reflected some of the same findings in a report released by Gartner on Feb. 22, which also showed significant growth by Sun. Click here to read more about the Gartner report on Suns recent growth. Scaramella attributed Suns growth to its improving financial picture during the second half of 2006, its "Try and Buy" program, which helps get its hardware into the data center, and the growing use of its Solaris operating system. In 2007, Sun entered into a new agreement with Intel that analysts say should help the company continue its growth. In the fourth quarter, IBM held the top server vendor spot with $5.8 billion revenue and 37.9 percent of the market. In the same quarter, HP was second with $4 billion in revenue and 26.8 percent of the market. Sun, Dell and Fujitsu/Fujitsu-Siemens rounded out the top five vendors. For the year, IBM held the top spot with $17.1 billion in server revenue and 32.8 percent of the market. HP took the second spot with $14.2 billion in revenue and 27.2 percent of the market. Sun and Dell were virtually tied for third place, while Fujitsu/Fujitsu-Siemens rounded out the top five. In the x86 market, HP was the top vendor in the fourth quarter, while Dell and IBM tied for second. HP also finished first in the blade market with 41.9 percent of the market, compared with IBMs 37 percent. Power consumption is on the rise in the data center. Click here to read more. For both the quarter and the year, IBM was helped by its System x offering, but more importantly, according to Scaramella, by its midrange and high-end System z and System p products. In addition, the IDC study found that Linux server revenue grew 15.3 percent in the fourth quarter compared with the fourth quarter of 2005. However, Linux server shipments decreased 0.8 percent for the year due to consolidation in the data center. Microsoft Windows servers grew both in terms of revenue and shipments in 2006 compared to 2005. Unix servers also experienced revenue growth year-over-year, according to IDC. Check out eWEEK.coms for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.
 
 
 
 
 
 
 
 
 
 
 

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