HP, IBM Lead Strong Q3 Server Market, IDC Says

The worldwide server market saw some of the fastest growth in 10 years during the third quarter, IDC said. HP and IBM were the top vendors during the quarter.

The worldwide server market saw revenues grow 13.2 and shipments jump 13.1 percent in the third quarter as demand for systems continued to increase worldwide, according to market research firm IDC.

Hewlett-Packard took over the lead in the server revenue space as businesses push for x86-based systems, IDC said in a report released Dec. 1. IDC's report echoes numbers that Gartner released Nov. 29. Gartner found that third-quarter server shipments grow 14.2 percent and revenues rise 15.3 percent.

The server space is continuing a strong rebound after several poor quarters during the recession last year, according to IDC analyst Matthew Eastwood.

"The server market experienced its strongest growth in 10 years in the third quarter of 2010," Eastwood said in a statement. "All geographic regions exhibited positive growth for the second consecutive quarter as the infrastructure build-out and refresh extends across SMB, enterprise, public sector, and cloud/hoster organizations. While much of the third-quarter refresh occurred in x86 and CISC-based mainframes, IDC expects the recovery to extend to Unix platforms in the fourth quarter of 2010."

HP garnered 33.4 percent of the market based on revenues, which for HP increased 22.2 percent, according to IDC. IBM, which held the lead in the third quarter of 2009, came in second, with 30.6 percent market share. Dell, Oracle and Fujitsu rounded out the top five list of the world's largest server OEMs.

Though its Power systems business continued to struggle, IBM saw demand grow for its System z mainframes, thanks in large part to the July unveiling of its zEnterprise system, and it's x86 business remained strong, IDC said. IBM's z/OS server revenue jumped 14.8 percent over the same period last year, growing to $1 billion, or 8.6 percent of all server revenue in the third quarter.

The x86 market saw revenue rise 28.1 percent, to $7.8 billion, with shipments growing 13.8 percent to 1.9 million units.

"Within the x86 server market, customer demands have increased for x86 servers with advanced performance capabilities," IDC analyst Reuben Miller said in a statement. "Though the x86 market is experiencing annual positive growth for both unit sales and revenue, this shift in demand for more robust systems is providing vendors with higher growth rates in revenues over units sales, and in turn, higher profitability."

The Unix server market continued to contract, particularly in the high- and low-end sectors, according to IDC. However, there was growth in the midrange sector-systems starting at $25,000 to $250,000-thanks to consolidation projects where businesses are moving workloads over from older Unix systems, and buildouts in such areas as telecommunications, banking and government.

Blade servers accounted for 14.1 percent of all the third-quarter server revenues, according to IDC. Blade revenue grew 23.1 percent and shipments jumped 5.5 percent. Blade servers were not hurt as badly as other form factors by the recession last year, so in comparison with other systems, their percentage increases were not as impressive, IDC said. However, they are in demand.

"Blade systems represent a strategic element of server portfolios, as vendor utilize the platform as the foundation for converged solutions," ID analyst Jed Scaramell said in a statement. "Additionally vendors continue to expand their blade offerings to support more workloads, including extreme virtualized environments, scale-out deployments, and higher-end workloads."