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    HP Overtakes IBM in Server Revenues, Gartner and IDC Say

    By
    Jeff Burt
    -
    May 26, 2010
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      Hewlett-Packard grabbed the worldwide market share lead from IBM in the first quarter as sales globally continue to rebound, according to market research firms IDC and Gartner.

      Both firms said HP saw server revenues jump while IBM figures slid in the quarter.

      HP and IBM were both helped by increasing demand for their respective x86 servers, but IBM was hurt by businesses waiting for refresh cycles in its Power and mainframe businesses. IBM officials introduced their first Power7 systems in February as the company looked to ramp up its competition in the $14 billion Unix server market against HP and Oracle’s Sun business.

      More announcements are expected from IBM later this year in both its Power7 and System z mainframe businesses.

      Gartner, which published its numbers May 25, had HP revenues growing 15.9 percent over the same period last year, while IBM saw a 2.1 percent decline. IDC had HP revenues jumping 16.3 percent, and IBM’s falling 1.4 percent.

      Both analyst firms had the global server market growing at a healthy pace. According to Gartner, worldwide server shipments grew 23 percent over the first quarter in 2009, and revenue jumped 6 percent. IDC, which released its numbers May 26, tagged revenue growth at 4.6 percent, to $10.4 billion, and shipments increasing 23 percent, the fastest year-over-year quarterly shipment growth in more than five years.

      “We’ve seen a return to growth on a worldwide level, but the market has not yet returned to the historical quarterly highs that were posted in 2008, and there were some interesting variations in that growth,” Gartner analyst Jeffrey Hewitt said in a statement. “Emerging regions that were expected to grow, such as Asia/Pacific, forged ahead, while some mature markets, such as the U.S., produced better-than-expected results, as other countries and regions had a ‘mixed bag’ of results.”

      The x86 segment again was the fastest growing, the analyst firms said, jumping 25.3 percent in shipment and 32.1 percent in revenue, according to Gartner.

      “The market recovery has been led by sharply higher demand for x86 servers around the world as SMB and enterprise customers aggressively refresh their infrastructures,” IDC analyst Matt Eastwood said in a statement. “IDC expects the recovery to extend to Unix and mainframe platforms in the second half of 2010 as the technology refresh extends from volume- to value-oriented systems with somewhat longer planning horizons. It’s also important to note that we are in the middle of one of the sharpest periods of market inflection in a decade and we expect significant shifts in technology usage and market shares to occur as the recovery continues.”

      The high-end Unix server market saw revenues decline-29 percent, according to IDC, 27 percent, Gartner said-due in large part to businesses waiting for the Power7 refresh from IBM, which began midquarter, and HP’s new Integrity system powered by Intel’s latest Itanium 9300 chips.

      Businesses also had to wait for more details regarding Oracle’s acquisition of Sun Microsystems.

      “Challenges remain in this segment as the longer sales cycles that we see for these platforms are currently compounded by significant product refreshes for both IBM and HP,” Gartner analyst Adrian O’Connell said in a statement. “The integration of Sun into Oracle is an additional factor that complicates current levels of demand. We expect demand in this segment to improve during 2010, but the vendors in this segment will be facing increasing challenges from Windows and Linux platforms.”

      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

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