IDC: HP Reaps Blade Benefits in Q3

The latest quarterly server survey finds that IBM still leads all other vendors in revenue, but HP continues to dominate the blade market.

The worldwide blade server market picked up steam in the third quarter of 2007, reaching more than $1 billion in revenue in a quarter for the first time, according to the latest survey from IDC.

The biggest beneficiary of the blade market continues to be Hewlett-Packard. The Palo Alto, Calif., company now claims 42.1 percent of the market and its blade revenues climbed nearly 80 percent in the third quarter compared with the third quarter of 2006, according to the Nov. 29 IDC report.

Blades accounted for about 10 percent of all worldwide server shipments during the quarter and IDC found that vendors are pouring more money into blades. In addition to selling blades to more midmarket and smaller businesses, vendors are incorporating new technologies, such as virtual I/O, to make blades easier to manage in the data center.

All blade revenue—x86, RISC and EPIC (Explicitly Parallel Instruction Computing)—accounted for 7.9 percent of all worldwide server revenue in the quarter, and revenues grew 41.4 percent year-over-year. While HP held the largest blade market share among the major OEMs, IBM placed second with a 33 percent market share.

Overall, worldwide server market revenue hit $13.1 billion during the quarter, but that accounted for less than 1 percent year-over-year growth. Part of the reason for this lackluster performance can be traced to concerns about the U.S. economy slowing down and changing IT buying patterns, according to IDCs analysis.

However, IDC found that IBM still led all other vendors in terms of overall server revenue for the third quarter with about $3.9 billion in worldwide sales. However the IDC report found that IBMs mainframe business dropped off for the first time in more than a year and revenues from System z plummeted more than 30 percent. The IDC survey reflected a similar report from Gartner, which found that both IBMs System z mainframe and System i businesses slacked off in the quarter and IBMs total revenues fell 8.5 percent compared with the third quarter of 2006.

On the other hand, HPs revenues from its server business grew more than 10 percent for a total of more than $3.7 billion.

/zimages/2/28571.gifClick here to read more about Hewlett-Packard and its midmarket blade business.

Among the other top server vendors, Dell continued to make gains compared with last year. The Round Rock, Texas, companys revenues increased 13.5 percent for a total of $1.5 billion for the quarter. Sun Microsystems revenue grew about 1 percent for a total of $1.3 billion. Fujitsu/Fujitsu Siemens round out the Top 5 with revenues of $706 million.

Revenue from Microsoft Windows servers topped $5 billion during the third quarter, while Linux server revenue increased more than 10 percent for a total of $1.8 billion.

By comparison, x86 server revenue grew by about 9 percent but accounted for $7.2 billion in revenues for the quarter. Unix server revenue grew about 4 percent, according to IDC.

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