IBM Slips in Latest Gartner Server Study

While it still leads in revenue, IBM's shipments were down in the third quarter of 2007 compared with last year.

While IBM still dominates the worldwide server market when its comes to revenue, Big Blues system shipments fell in the third quarter of 2007 as the company lost ground to Hewlett-Packard and Dell, according to a new Gartner report released Nov. 26.

The report, which looked at third-quarter 2007 server shipments and revenue, found that IBMs revenue still topped $4 billion, but that number was down about 8 percent compared with the third quarter of 2006. The companys server shipments also fell about 4 percent during the quarter, while HP and Dell increased both their server shipments and revenue.

The Gartner survey reflects IBMs own third-quarter financial results, which showed its hardware division lost about 10 percent of its sales compared with 2006. Gartner found that revenue for IBMs System z mainframes and System I server slipped, while its System p and System x products performed better. IBM has announced plans to place more emphasis on its System p systems during the next several months.

Overall, the Gartner report found that worldwide server shipments increased about 8.7 percent in the third quarter compared with 2006, while revenue climbed 2.6 percent for a total of $13.4 billion.


Click here to read the results from the previous Gartner server survey.

The market was driven by shipments of volume x86 systems, the growing need for computer power by customers in emerging markets and the need for increased data capacity, according to Gartner. While virtualization technology, which allows enterprises to consolidate servers, continues to grow in importance, Gartner found the technology did not have an impact on the server market during the quarter.

While IBM struggled in the third quarter, HP grew its revenue nearly 14 percent to more than $3.7 billion, and the Palo Alto, Calif., company finished second to IBM in terms of revenue for the quarter. Dell increased its revenue 12.6 percent to $1.6 billion and placed third. Sun Microsystems, which increased revenue 11.4 percent, and Fujitsu/Fujitsu Siemens, which increased revenue 3.4 percent, rounded out the Top 5 on Gartners list.

In terms of worldwide server shipments, HP led all vendors in the third quarter and grew its shipments more than 20 percent and claimed a 29.3 percent market share. Dell increased its overall shipments by 5.4 percent. The Round Rock, Texas, vendors 21.8 percent market share in the third quarter placed its behind HP in terms of shipments.

IBM, which watched its third-quarter shipments decrease, finished third. Sun lost 4.5 percent of its shipments market share and was fourth on the list. Fujitsu increased its shipments more than 17 percent, and now the company controls 3.4 percent of the worldwide market.

In addition to shipping more servers than other vendors, HP increased its blade server shipments by 91 percent compared with the third quarter of 2006. While x86-based systems made up the majority of the worldwide server market, Gartner found that revenue from RISC-Itanium and Unix servers increased by about 8 percent in the quarter.


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