Technology giants Hewlett-Packard and IBM landed at the top of the worldwide server market as factory revenue in the overall market decreased 4.8 percent year-over-year to $12.6 billion in the second quarter of 2012, according to a report from IT research firm IDC.
Server shipments decreased 3.6 percent year-over-year to 2 million units in the second quarter. The numbers represent the third consecutive quarter of year-over-year revenue decline, as server market demand continues to soften.
During the second quarter, HP and IBM jointly held the top position in the worldwide server market-with 29.6 percent and 29.2 percent factory revenue share, respectively, a statistical tie. (IDC declares a statistical tie in the worldwide server market when there is less than 1 percent difference in the revenue share of two or more vendors.)
HP's factory revenue declined 5 percent in the second quarter, compared with a year earlier. Sales for HP's x86-based ProLiant servers were flat; this was offset by continued declines in HP Integrity server demand.
IBM saw an 8.2 percent year-over-year decline in factory revenue, and lost 1.1 percentage points of share in the quarter on soft demand for System x, Power Systems and System z, according to IDC.
Third-place finisher Dell garnered 16 percent factory revenue market share in the second quarter, and saw factory revenue increase 5.9 percent year-over-year in the second quarter; this helped Dell reach its highest-ever server market share in any quarter.
"Worldwide server revenue declined for the third consecutive quarter in 2Q12 as the market continued working its way through a number of technology transitions impacting customer demand for x86, Unix and mainframe-class systems. That said, it is also clear that economic uncertainty is weighing on the market and the sales cycle is lengthening," Matt Eastwood, group vice president and general manager of enterprise platforms at IDC, said in a press statement. "It is important to note that IDC believes that server demand will begin to improve in the second half of 2012 following a number of critical product refreshes which continue to be announced."
A similar report from IT research firm Gartner found the United States grew the most significantly in server shipments, with an 8.4 percent year-over-year increase in the second quarter. The U.S. also posted the highest vendor revenue growth at 6.5 percent for the period, according to the report.
Gartner analysts said in the latest quarter worldwide server shipments grew 1.4 percent over the second quarter of 2011, while revenue declined 2.9 percent year-on-year. HP topped Gartner's worldwide market share list with 29.1 percent, in spite of a shipment decline of 5.6 percent from the second quarter of last year, followed by IBM with 27.2 percent market share.
"The slight unit growth for the second quarter of 2012 was contrasted by a decline in revenue on a global level with geographic variations continuing to be shown based on the ongoing differences in economic conditions by region," Jeffrey Hewitt, research vice president at Gartner, said in a prepared statement. "In terms of revenue growth, only the Asia-Pacific [region] and the United States produced growth for the quarter-all other regions declined."