A week ago, executives with both Hewlett-Packard and Dell, while talking about their latest quarterly financial numbers, pointed to the increase in x86 server sales in the final few months of 2009.
HP saw a 27 percent revenue increase in its industry-standard server business in the quarter, while Dell saw server revenues grow 26 percent.
And both HP President and CEO Mark Hurd and Michael Dell, his counterpart at Dell, said they expect the momentum in their respective server businesses to continue in 2010 as corporations look to refresh their aging systems with the newest generation of machines powered by the latest chips from Intel and Advanced Micro Devices that offer greater performance and energy efficiency, and lower capital and operating costs.
"We do see a pretty robust refresh cycle throughout the year," Hurd said during a conference call with reporters and analysts Feb. 17.
The latest numbers from research firms Gartner and IDC back up those claims. In reports issued Feb. 24, both firms said that fourth-quarter 2009 shipments increased while revenues declined year over year. However, sales in the x86 space began to pick up in the third quarter, thanks in large part to the new processors from Intel and AMD, and that momentum continued into the fourth quarter.
Intel rolled out its Xeon 5500 Series "Nehalem EP" chips, while AMD ran out its six-core "Istanbul" Opteron.
"Going into 2009, we saw a very large drop off in the first and second quarters, especially for x86," IDC analyst Dan Harrington said in an e-mail. "What we saw with the release of the new chip technologies was somewhat of a pent-up demand for the new products, which caused significant pop in Q3 and into Q4. End-users had very limited budget in 2009, and ... those that were able to live with their existing infrastructure did so until the release of these new server offerings."
Gartner analyst Jeffrey Hewitt said the numbers, though, had to be looked at with the global recession in mind.
"It is important to put this into context," Hewitt said in a statement. "The fourth quarter of 2008 was quite weak, so the fourth quarter of 2009 did not have to produce huge x86 server numbers to result in an increase."
Gartner said that in the fourth quarter, global server shipments grew 4.5 percent over the same period in 2008, while revenues declined 3.2 percent. Like IDC, Gartner said IBM retained an edge over HP in revenue. Gartner also had HP, Dell and IBM as the top three in shipments, respectively.
IDC said that in the quarter, worldwide server shipments were up 1.9 percent, to 1.9 million units, while revenues were down 3.9 percent, to $13 billion. The x86 server market saw revenues grow 12.6 percent and shipments jump 3.8 percent.
Both research firms said blade systems also saw shipments and revenues grow, while the non-x86 server market-including Unix systems-fell in both shipments and revenues.
IDC's Harrington said he expects the momentum for x86 systems to continue into 2010, particularly in the higher end, as Intel prepares to release its eight-core "Nehalem EX" Xeons and AMD readies the eight- to 12-core "Magny-Cours" Opterons for release in March.
"As both AMD and Intel release new higher-end chips this year, including Magny-Cours and Nehalem EX, we expect there to be continued interest in x86, especially as a potential substitute for some more expensive low- to mid-range non-x86 solutions," he said.
In speaking with reporters and analysts Feb. 18, Dell agreed.
"As we go to Nehalem EX, the ROI [for customers] just goes higher, and it becomes much more compelling," Dell said. "The age of the installed base is significant, and our customers are seeing a refresh as a productivity enabler."
Harrington said the non-x86 space saw unseasonable weakness in the fourth quarter, not only due to the growing strength of the x86 systems, but also because customers were waiting for new systems based on IBM's Power7 processors and HP Integrity servers running on Intel's new Itanium 9300 "Tukwila" chips. Both new platforms were released Feb. 8.
In addition, customers were awaiting further clarification about the future of Sun Microsystems' SPARC/Solaris systems after Oracle completed its $7.4 billion acquisition of Sun in January.