Cisco joins top 5 server vendors for the first time, IDC says

IDG News Service - Cisco Systems has entered the list of the top 5 server vendors for the first time, drawing level with Fujitsu and Oracle in a tie for fourth place, research firm IDC said on Wednesday.

It's a symbolic victory for Cisco that comes four years after the networking vendor entered the server market with its Unified Computing System, combining compute, network and virtualization resources in a single box.

Its share of the market still lags far behind that of IBM, Hewlett-Packard and Dell, but IDC's results are a further sign that Cisco is a serious player in the server business.

Cisco ended the fourth quarter with 3.3 percent of server systems revenue, compared with 3.4 percent for Fujitsu and 4.1 percent for Oracle. That put the three vendors in a statistical tie for fourth place, IDC said. Oracle's server business fared worst, declining 18 percent from the fourth quarter of 2011, while Cisco's surged 51 percent.

At the top of the market, IBM retained its lead with 36.5 percent of server sales, followed by HP with 24.8 percent and Dell with 15.1 percent, IDC said.

The fourth quarter was a good one overall for the server industry, at least compared to the rest of the year. Sales were up 3.1 percent from the final quarter of 2011, to $14.6 billion. That marked the first quarterly increase in server revenue in five quarters, IDC said.

The full-year picture wasn't so good, with overall sales down 1.9 percent from 2011, at $51.3 billion.

The quarterly sales increase was driven by x86 servers, with revenue up 4.2 percent, and high-end systems, which were up 6.4 percent, thanks largely to the release of a new IBM mainframe last August.

"The IBM System z mainframe platform had its highest quarterly revenue since 1997, generating nearly $2 billion and driving the overall server market to positive growth in the quarter," IDC analyst Jean Bozman said in a statement.

Revenue from midsized systems, including many types of Unix servers, declined 10 percent, IDC said.

Quarterly server sales were up sharply in the U.S., Asia/Pacific and Latin America, but weak everywhere else, IDC said.

Gartner also released its server market-share figures Wednesday. Cisco made Gartner's top 5 for the volume of servers it sold, something it has achieved before, but not for server revenue.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com