Cisco, Fujitsu See Server Shipments Grow in Weak Q1, Gartner and IDC Say

HP, Dell, IBM and Oracle had a tougher go of it, all seeing revenue and shipments decline, the analysts firms found.

Cisco Systems and Fujitsu were among the few bright spots in a worldwide server market that saw shipments increase slightly in the first quarter while revenues fell, according to market research firms IDC and Gartner.

Analysts from both firms pointed to anticipated upgrades in x86 systems€”based on Intel€™s new Xeon E5 processors, launched in March€”as a key contributing factor in the quarterly numbers, with businesses holding off on purchases until the new servers became available. In addition, the strong server numbers from 2011 made the numbers in the first quarter this year look especially weak in comparison, they said.

"The server market worked through a transitional period in the first quarter of 2012 as suppliers prepared to introduce numerous critically important x86 server offerings,€ Matt Eastwood, group vice president and general manager of enterprise platforms at IDC, said in a statement. €œAt the same time, difficult year-over-year compares helped distort some results across other segments of the market."

For the quarter, IDC said in a May 30 report that global server revenues fell 2.4 percent, to $11.8 billion€”marking the second consecutive quarter of revenue decline€”while shipments rose 2.7 percent, to 2 million units. Gartner€™s numbers were similar, with revenues falling 1.8 percent, to $12.4 billion, and shipments growing 1.5 percent, to 2.3 billion units.

In shipments, the top three vendors€”Hewlett-Packard, Dell and IBM€”all saw declines in comparison with the first quarter in 2011, according to IDC. However, both Fujitsu€”at No. 4€”and fifth-place Cisco saw shipments increase, with Cisco€™s shipments jumping 70.9 percent, from 23,690 units to 40,498, according to Gartner. Cisco joined the server crowd in 2009, when it launched the Unified Computing System (UCS), a converged data center solution that includes not only Cisco networking technology, but also Cisco-branded servers.

Cisco executives in March unveiled UCS 3.0€”including new servers powered by Intel€™s Xeon E5-2600 chips€”and said that the company had more than 11,000 UCS customers and a revenue run rate of $1.3 billion.

Regarding revenues, IDC and Gartner said the top four vendors€”HP, IBM, Dell and Oracle€”saw declines in the quarter. Only Fujitsu, at No. 5, had revenue growth, jumping 7.3 percent. Gartner had Fujitsu€™s revenue growth at 4.5 percent. Gartner analysts said HP saw revenue declines in both its x86-based ProLiant and Itanium-based Integrity lines.

According to Kuba Stolarski, research manager for enterprise servers at IDC, the ongoing debate between HP and Oracle over the fate of Itanium€”Intel€™s high-end non-x86 platform that powers HP€™s high-end Integrity and NonStop systems€”played a role.

"The Unix server refresh has largely ended as the Unix server market is in decline again, driven by workload consolidation and migration to competing platforms," Stolarski said in a statement. "Recent heightened awareness of the future of Itanium is also pressing down on customer demand for non-x86 servers, and price competition is helping to drive down revenues in this segment. IDC expects the Unix server market to stabilize over the next few years and remain a smaller, specialized segment of the overall server market."

Despite the market anticipation of Intel€™s Xeon E5-2600 processors, Gartner and IDC both said the x86 server segment saw some growth in both revenues and shipments.