Gartner: IBM Regains Top Spot in Server Market

According to Gartner, IBM regained the No. 1 position in the server market in the fourth quarter of 2010 on the strength of System z and System x sales.

IBM regained the No. 1 position in servers in the fourth quarter of 2010, capturing 35.5 percent share of worldwide server revenue, a new report from Gartner shows.

In the hotly contested server market, IBM outperformed key competitors in the quarter, growing revenue by 26 percent and gaining 2.8 points of market share, according to Gartner.

The Gartner report also found that IBM was No. 1 in the market for UNIX servers, with nearly 42 percent market share in the fourth quarter. IBM grew UNIX revenue by 9.9 percent, according to Gartner.

IBM ended the year with $5.2 billion in server revenue for the fourth quarter of 2010, accounting for 35.5 percent of worldwide server revenue. The company had server revenue of $4.1 billion, or 32.7 percent market share, in the fourth quarter of 2009.

IBM's growth was fueled by its System z and System x product lines.

"The introduction of new mainframe platforms from IBM helped to drive increases in the mainframe segment, with 68.3 percent revenue growth of IBM's System Z platforms in the fourth quarter," Jeffrey Hewitt, research vice president at Gartner, said in a statement.

Hewitt said HP and IBM are tussling for outright market leadership as both vendors achieved revenue of over $15 billion for 2010, both with a market share of 31 percent. However, HP achieved stronger year-on-year growth of 18.9 percent to IBM's 9.2 percent. And HP has demonstrated strength with the results of its x86 ProLiant line all year long, while IBM soared in the fourth quarter based largely on its System z and System x results.

Of the Top 5 global vendors, IBM, HP and Dell delivered double-digit revenue growth, while Oracle and Fujitsu experienced revenue declines in the fourth quarter of 2010.

An IBM spokesman said these results reflect IBM's focus on innovation and integration at every level of the systems stack-from semiconductor technology through application optimization. IBM officials said Big Blue is beating competitors by meeting the demands of increasingly specialized, data-intensive workloads-from real-time financial services to electronic health records to smart electrical grids. Rather than a commodity approach, IBM is focused on heavy lifting, including analytics, virtualization and greater data center efficiency, the company said.

Moreover, Q4 of 2010 was the first full quarter customers had full access to some of IBM's key server investments, such as the new IBM zEnterprise System mainframe and a complete family of Power servers that include new Power7 technology-the system used in IBM's Watson supercomputer's win over human competitors on the quiz show Jeopardy! In the fourth quarter, System z grew revenue by 69 percent and many of the new Power7-based models sold out, IBM said.