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    Dell, Cisco Shine in Slowing Server Market: Gartner, IDC

    Written by

    Jeff Burt
    Published December 2, 2012
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      Dell was the only top-tier server vendor in the third quarter to see sales gains in a server market that continues to see revenues decline, due in large part to an uncertain global economy, according to analysts with Gartner and IDC.

      In numbers released last week, Dell remained in the No. 3 position in terms of revenue—with growth between 8.2 percent and 10.3 percent compared with the same period last year—but saw its market share grow as leaders IBM and Hewlett-Packard saw sales decline, the analysts firms said. In addition, Dell and Cisco Systems, with its Unified Computing Systems (UCS) converged data center solution, were the only ones in the top five to see server shipments increase, according to Gartner numbers.

      Cisco—whose UCS includes Cisco-branded servers and networking equipment, as well as storage from the likes of EMC and NetApp and virtualization technology from VMware—saw shipments grow 40.4 percent over the third quarter in 2011, and its market share jump to 2.3 percent, from 1.7 percent a year ago.

      “Worldwide server revenue declined for the fourth consecutive quarter in 3Q12. The market was constrained by poor macro-economic conditions in many geographies coupled with a number of technology transitions that served to further hamper the market,” Matt Eastwood, group vice president and general manager of enterprise platforms at IDC, said in a statement.

      Overall, global server revenues came in between $12.2 billion and $12.6 billion, according to the analyst firms. IDC said the $12.2 billion represented a 4 percent decrease over the same period last year, while the $12.6 billion noted by Gartner was a 2.8 percent decrease. However, Gartner said server shipments grew 3.6 percent, to more than 2.4 million units.

      IBM continued to lead in revenues, but saw its revenues and market share slip, according to both analyst firms. IDC analysts said revenue for Big Blue’s System z mainframes fell as customers prepare for the transition to the company’s new zEnterprise EC12 mainframe, which was introduced in August. HP was a close second in revenues, followed by Dell, Oracle and Fujitsu. In server shipments, HP remained on top, but saw its shipments numbers and market share fall, according to Gartner numbers. Dell, in the second spot, saw shipments grow 9 percent and its market share rise to 23 percent. IBM was third in shipments, followed by Fujitsu and Cisco.

      Both IDC and Gartner analysts said revenues and shipments for x86 servers, based on processors from Intel and Advanced Micro Devices, continue to grow, while the market for non-x86 systems—including RISC, EPIC (based on Intel’s Itanium processor) and CICS-processor based servers—continues to contract. Organizations continue to migrate workloads from these systems onto less expensive x86-based servers, though Kuba Stolarski, research manager of enterprise servers at IDC, said non-x86 systems could see a bump heading into 2013.

      “The Unix server market continued to struggle ahead of year-end refresh cycles,” Stolarski said in a statement. “IDC expects a short-term easing in the high-end market’s decline as technology refreshes, including Intel’s Poulson update to its Itanium line, begin to take their course. However, mission critical applications continue to migrate to x86 platforms, placing increasing pressure on the high-end server market.”

      Intel introduced its Itanium 9500 Poulson chips in November, while HP—by far the largest users of Itanium chips—announced a refresh of its Integrity line of high-end systems based on the processors. Intel executives also aimed to end speculation about the future of the Itanium processor, showing off a roadmap that includes the next-generation “Kittson” chip that will come out after 2013. The fate of Itanium was the subject of a contentious legal battle between HP and Oracle executives, who announced in 2011 that the company was ending Itanium support in its enterprise software, arguing that Intel intended to end development of Itanium in favor of its x86-based Xeon chips. HP and Intel said that was untrue, and a judge ruled this year that Oracle has to continue supporting Itanium.

      “x86 server shipments grew 4.3 percent in the third quarter of 2012, and revenue increased 4 percent from the third quarter of 2011,” Jeffrey Hewitt, research vice president at Gartner, said in a statement. “RISC/Itanium Unix servers continued to fall globally for the period—a 31.1 percent decline in shipments and a decrease of 16.4 percent in revenue compared to the same quarter last year. The ‘other’ CPU category, which is primarily mainframes, showed a decline of 17 percent in terms of revenue.”

      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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