IBM, HP Remain Locked in Server Battle

IBM leads in server revenue, while Hewlett-Packard shipped the most units, according to a Gartner survey.

Once again, IBM and Hewlett-Packard are fighting for server supremacy.

In its latest survey of the server market, Gartner found that IBM led all other vendors in terms of revenue in the second quarter of 2007, while HP shipped more servers than any other OEM. Gartner, which is based in Stamford, Conn., released its latest findings Aug. 21.

For the quarter, IBMs server revenue stood at about $3.8 billion, and the Armonk, N.Y., company saw increases in its mainframe systems, as well as its System x and System p offerings. Only IBMs System i revenues declined during the quarter. For the period, IBM held about 30 percent of the market, an increase of 6.5 percent over the second quarter of 2006, according to Gartner.

Overall, worldwide server market revenue increased a modest 5.1 percent for the second quarter of this year for a total of nearly $13 billion. Total server shipments increased 2.7 percent, and vendors shipped almost 2 million systems during the quarter.

HP, which is based in Palo Alto, Calif., led OEMs in terms of shipments, as the company moved more than 650,000 systems in the quarter, an increase of 17 percent compared with last year. HP now controls 31.5 percent of this segment of the market.


Click here to read about a new agreement between IBM and Sun.

In the report, Jeffrey Hewitt, an analyst with Gartner, said x86 systems continued to dominate the market, despite economic problems and the increasing use of virtualization by enterprises.

"There were a number of dynamics that affected the market, but the x86 server area was the real growth contributor," Hewitt wrote in the report. "A strong underlying demand for increased capacity and new applications is driving volume growth in spite of potential inhibitors like virtualization and economic concerns."

Blades were another important part of the market during the quarter, with total shipments increasing 14 percent. HP led other vendors, and the companys total shipments increased 73 percent, according to Gartner.

Once again, the RISC-Itanium Unix market continued to dwindle. Hewitt wrote that shipments fell 18 percent in the quarter, while revenues decreased 1.5 percent.

Among the other vendors, Dell had a solid quarter. The Round Rock, Texas, company saw its revenues climb 19.6 percent for a total of about $1.5 billion for the quarter. The company also shipped about 460,000 systems, an increase of 7.3 percent compared with the second quarter of 2006.


Click here to read more about the server market in the first quarter of 2007.

After IBM, HP was second in terms of revenue with about $3.7 billion, an increase of 9.2 percent compared with 2006. Sun Microsystems was third and increased its revenues 7.9 percent compared with last year. Dell was fourth, followed by Fujitsu/Fujitsu Siemens, which lost nearly 5 percent of its revenue.

In worldwide server shipments, HP and Dell were followed by IBM, which despite growing its revenue actually lost market share in this category. Big Blues shipments fell by 6.5 percent compared with 2006.

Sun also lost market share in terms of shipments. Compared with the second quarter of 2006, Sun server shipments fell 11.4 percent in the same quarter of 2007. Fujitsu placed fifth in terms of shipments and increased its market share by 14.4 percent in this category during the quarter.


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