IBM, HP server sales fall in Q2, while Dell revenue grows

IBM and Hewlett-Packard tied for the top position by revenue, sharing about 60% of the market

IBM and Hewlett-Packard tied for the top position in server factory revenue in the second quarter, with a 29.2% and 29.6% share respectively, IDC said on Tuesday.

But Dell was the only vendor among the top five whose server revenue increased. The 5.9% growth in the quarter from the same quarter last year took it to the third position, its highest ever server market share. Oracle and Fujitsu got to the fourth and fifth positions.

Overall revenue and shipments fell from a year earlier as the market softened after a strong refresh cycle in the last two years, the research firm said.

Server shipments decreased 3.6% year-over-year to 2.0 million units in the quarter, the first annual decline in almost three years, while revenue decreased 4.8% year-over-year to $12.6 billion, the research firm said.

The highest revenue decline was in mid-range systems at 11.2%, followed by 7.6% decline in larger systems. The decline in volume systems was smaller at 2.5%.

IBM had a 8.2% year-over-year decline in factory revenue losing 1.1 points of share in the quarter because of soft demand for its servers ahead of a number of major product transitions, while HP's factory revenue declined 5% year-over-year in the second quarter, IDC said.

The market for non-x86 servers declined 19.4% by revenue from the same quarter last year to $3.9 billion, making it the fourth consecutive quarter of revenue decline for non-x86 based systems, which accounted for 30.6% of the server market in the second quarter. Unit shipments of x86 servers were down 0.6% to 1.9 million servers, the first decline in about three years, but revenue picked up in the quarter by 3.5% to $8.7 billion, as the market is moving towards higher-end configurations with higher average selling prices. HP led the market with a 36.4% revenue share, followed by Dell and IBM.

Unix servers had a revenue decline of 20.3% year-over-year to $2.3 billion for a 18.4% share of server revenue for the quarter. IBM saw Unix server revenue drop by 10%, but its share of this market grew. The Unix server is headed towards becoming a smaller, specialized segment of the server market, catering primarily to customers "who are looking for high levels of availability and stability in a scale-up architecture," IDC said.

Linux servers accounted for 22.1% of all server revenue in the quarter, up 1.4 points when compared with the second quarter of 2011. Linux server demand was helped by high performance computing and cloud infrastructure deployments, as hardware revenue increased at 1.7% year-over-year to $2.8 billion in the second quarter.

Bladed servers accounted for 16.9% of all servers by revenue at $2.1 billion, as in the second quarter factory revenue of blades increased 6.3% year-over-year and shipment growth increased by 4.1%. HP led in the bladed server market with a 51.5% revenue share in contrast to IBM at second place with a 15.9% revenue share.

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