Gartner: Server Shipments, Revenue Increased in -07

The server market grew in 2007 despite concerns about an economic slowdown, Gartner says.

Despite concerns about the health of the U.S. economy, worldwide server shipments and revenue increased in 2007, with Hewlett-Packard and IBM continuing to dominate all other vendors, according a new Gartner report.

In 2007, worldwide server revenue grew 3.8 percent for a total of more than $54.8 billion. Overall, vendors shipped more than 8.8 million systems last year, an increase of 7.4 percent compared with the 8.2 million servers that were shipped in 2006, according to the Feb. 21 report.

The Gartner report gave no indication as to whether the server market would continue to grow in 2008. Earlier in February, Forrester Research and IDC each released reports indicating that IT spending might begin to slow down in the next few months, especially on purchases of hardware such as servers and PCs.

IBM once again topped all other vendors in terms of revenue with more than $17 billion in sales in 2007, a relatively small increase over IBM's $16.9 billion in sales in 2006. The Gartner report found that IBM's System z mainframe business, as well as sales from its System i division, slowed down as customers shied away from refreshing older hardware.

While HP was second to IBM in terms of revenue, it did manage to ship more servers than any other vendor in 2007. HP shipped more than 2.6 million systems for the year, an increase of 16.6 percent over its 2006 shipments, and HP's revenues reached $15.5 billion for the year, an increase of 8.8 percent.

Blade servers continue to remain one of the fastest-growing segments of the market. For the year, shipments increased nearly 20 percent, while revenue grew more than 44 percent. HP and IBM continued to be the most dominant players, with the two companies controlling 78 percent of all blade revenue worldwide.

At the same time, shipments of RISC, Itanium and Unix servers fell 13 percent and revenue increased only 1.7 percent.

Dell also recorded solid results in terms of shipments and revenue, after struggling for several months as the company looked to reinvent itself as a more sophisticated supplier of IT hardware and services. In 2007, the company's revenues increased 13 percent to $6.2 billion and its server shipments increased 6.2 percent to about 1.9 million units, which placed it second to HP.

Sun Microsystems' revenues increased 3.5 percent year over year, but its shipments of servers slipped 8.3 percent. Fujitsu/Fujitsu Siemens, which rounded out the list of the top five vendors, watched its revenues decrease 1.5 percent year over year, but its shipments increased nearly 14 percent.

In addition to giving its annual report, Gartner broke out server shipments and revenue for the fourth quarter of 2007. For those three months, worldwide shipments increased nearly 11 percent and revenue grew 2.8 percent.