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    IBM Tops HP, Dell in Server Revenue, IDC Says

    Written by

    Jeff Burt
    Published February 28, 2011
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      IBM, based on the strength of its mainframe business and the overall health of its x86-based systems, retained the top spot in the server market for the fourth quarter of 2010 and the entire year, according to market research firm IDC.

      IDC’s findings, released Feb. 28, echo those of Gartner, which reported Feb. 24 that IBM was the world’s top server vendor in revenue, followed by Hewlett-Packard and Dell.

      In addition, IBM’s strong quarter was mirrored by the server market in general, which IDC analysts said is continuing its rebound from the global recession that gutted it in late 2008 and 2009. For the quarter, server revenue grew 15.3 percent, to $15 billion, marking the highest quarterly revenue in three years and the fourth consecutive quarter with increased year-over-year revenue growth, according to IDC.

      Worldwide server shipments jumped 6.1 percent, to 2.1 million units, in the fourth quarter. For the entire year, server revenue grew 11.4 percent and shipments rose 15.3 percent over 2009. Non-x86 systems were key players in the continued server market recovery, an indication that enterprises are still looking for a variety of system platforms to fill out their data center infrastructures, according to Matt Eastwood, group vice president of IDC’s Enterprise Platforms Group.

      “At the same time, data centers are being optimized to support virtualization, automation, convergence, workload-optimized systems and cloud strategies in both large and small organizations around the globe,” Eastwood said in a statement. “For end-users, there are more IT choices available than ever, many of which are designed to deliver impressive price-performance gains to the data center and virtually all of these IT infrastructure solutions leverage server platforms at their core.”

      For IBM, that demand for heterogeneous data centers was evident in its numbers. For the quarter, IBM grabbed 37.4 percent of the market based on revenue, with its revenue growing 21.9 percent from the same period last year. There was strong demand for its System z mainframes, as well as continued demand for its x86 System x servers, according to IDC.

      “The marked increase in System z revenue that was seen in the fourth quarter reflects the deep investment that IBM made in reinventing its long-lived data center platform by closely linking it to a distributed-system blade chassis running POWER and x86 systems for workloads with mainframe affinity,” Jean Bozman, research vice president for IDC’s Enterprise Platforms Group, said in a statement. “Pent-up demand within the installed base, following high-end server declines in 2009 and 2010, was a key driver in the mainframe revenue increase, showing both the need for increased capacity and mainframe customer support of this approach to hybrid-systems computing.”

      IBM in July 2010 unveiled a new mainframe system-the zEnterprise-which was designed to work as a central management point for enterprise data centers, with other systems leveraging the mainframe attributes. In a statement coinciding with the release of the Gartner numbers, IBM officials noted that the fourth quarter was the first full period that customers had access to such server offerings as the zEnterprise, as well as new Power7-based servers. IBM said that mainframe revenue in the quarter jumped 69 percent, and that many of the Power7-based systems were sold out.

      IDC analysts said the 69.1 percent revenue growth for IBM’s System z models was the fastest they had ever recorded for IBM mainframes, and noted that systems running IBM’s z/OS operating system accounted for 11.3 percent of all server revenue for the quarter. In addition, System z was the only platform outside of Windows and Linux to see positive revenue growth for the fourth quarter.

      HP, IBM’s top rival in servers, had 29.9 percent market share, followed by Dell at 12.6 percent. Rounding out the top five were Oracle-with the server business acquired via the Sun Microsystems purchase-and Fujitsu, which both saw revenue declines.

      For the year, IBM and HP were essentially tied, with IBM grabbing 31.9 percent of the server revenues in 2010, and HP 31.8 percent.

      HP was the top vendor in the fast-growing x86 server market, with 38.5 percent of the space, followed by fast-moving Dell, with 21.1 percent market share, and IBM, with 19 percent. In the fourth quarter, revenues for x86 servers grew 21.4 percent, with shipments growing 6.7 percent. The x86 systems accounted for 59.7 percent of all server spending in the quarter. For the year, x86 server revenue increased 28.7 percent, while shipments jumped 16.6 percent.

      “Within the x86 market, high-end servers showed higher growth rates-for both server shipments and revenue-than low-end servers,” Reuben Miller, senior analyst in IDC’s Worldwide Enterprise Server Group, said in a statement. “With the introduction of higher-performing processors with multiple cores, customers are finding more benefit in purchasing multi-socket server units than single-socket systems. As the demand for performance continues to increase with limited space available, systems that can hold more multi-core processors in a given space are becoming more valuable to customers.”

      HP also led in the blade-server market, with 53.4 percent of the revenue. IBM had 28.1 percent. Overall, fourth-quarter blade revenue grew 12.6 percent over the same period in 2009, and blades-including x86, EPIC and RISC platforms-accounted for 13.4 percent of server revenue in the quarter.

      Jeff Burt
      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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