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    HP, IBM, Dell Lead Server Market Recovery, Report Finds

    By
    Nathan Eddy
    -
    August 30, 2010
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      According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market increased 11 percent year over year to $10.9 billion in the second quarter of 2010. The firm said this is the second consecutive quarter of year-over-year revenue growth and the fastest quarterly revenue growth since 2003, as market demand continued to improve around the world.
      Server unit shipments increased nearly 24 percent year-over-year in the second quarter of this year, improving slightly over the strong 23 percent year-over-year shipment growth reported in the first quarter of 2010 and representing the fastest year-over-year quarterly server shipment growth in more than five years.
      Volume systems experienced the sharpest improvement with year-over-year revenue increasing 32 percent, the third consecutive quarter of positive growth for the segment, IDC noted. Midrange server demand improved “significantly” with year-over-year growth of nearly 7 percent, which IDC said was the segment’s first positive growth in nine quarters and another sign of improving server market conditions.
      However, demand for high-end enterprise systems continued to be soft, as revenue declined 23.6 percent when compared to the second quarter of 2009. The IDC report noted this is the seventh consecutive quarter of contraction in the high-end enterprise server segment of the server market, most of which occurred during the economic downturn.
      HP assumed the top position in the worldwide server market with 32.5 percent factory revenue share for Q2 2010. HP increased revenue 26 percnet year-over-year and gained 3.9 points of share from a year ago. IDC said the technology giant’s growth was led by strong demand for its x86 ProLiant servers during the quarter.
      IBM held the number two spot with 29.8 percent share for the quarter as factory revenue decreased 3.2 percent compared to the same quarter last year. “Although IBM experienced weakness in its Power Systems and System z servers as customers waited for the completion of a product refresh cycle for both product sets, demand for x86-based System x servers remained strong in the quarter,” the IDC report said.
      The report found Dell maintained their third place position with 15.6 percent factory revenue market share in Q2 2010. Dell gained 3.2 points of share year-to-year on healthy 39.1 percent revenue growth driven by demand from enterprise customers. Oracle maintained the fourth position in the worldwide server market, with 5.9 percent, a year-over-year revenue decline in Q2 2010 to 8.6 percent market share. Fujitsu, which rounded out the top five vendors, experienced a 7.9 percent increase in factory revenue, holding 3.4 percent revenue share in the second quarter of 2010.
      “The server market is at a crossroads. This is the fourth consecutive quarter of improving server market demand and the fastest quarterly server revenue growth IDC has reported in more than 5 years,” said Matt Eastwood, group vice president of enterprise platforms at IDC. “IDC continues to see widespread infrastructure refresh occurring across all geographies. While much of this refresh is occurring first in x86-based servers, IDC expects the recovery to extend to Unix and mainframe platforms in the second half of 2010. That said, it is clear that a wave of migration is also occurring as customers broaden their deployment of x86-based servers to a wider range of workloads.”

      Nathan Eddy
      A graduate of Northwestern University's Medill School of Journalism, Nathan was perviously the editor of gaming industry newsletter FierceGameBiz and has written for various consumer and tech publications including Popular Mechanics, Popular Science, CRN, and The Times of London. Currently based in Berlin, he released his first documentary film, The Absent Column, in 2013.

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