Dell's server strategy paying off
Focusing on service providers yields first quarter growth as Dell looks to offset growing decline in PC sales
Computerworld - The decline in PC spending has hit Dell hard, but the company's server business is growing, said IDC in its first quarter report on the worldwide server market.
Dell's share of worldwide server revenue reached 18.5% in in the first quarter of this year, up from 15.5% a year ago.
Cisco is another winner in IDC's quarterly report, released on Wednesday.
Cisco entered the server market in 2009 with its Unified Computing System, a virtualized platform that combines servers and networking. It now holds 4.1% of the worldwide market, up from 2.8% in the year-ago quarter, reported IDC.
Cisco and Dell grew despite an overall 0.7% decline in worldwide server shipments, said IDC.
Jed Scaramella, an analyst at IDC, said that despite the first quarter statistics, the overall server market isn't shrinking.
Enterprises now are more likely to increase capacity of existing infrastructure than add new servers, he said. "People are continuing to consolidate their environments," Scaramella said.
Dell has had success selling servers to service providers because of its focus on building high-density systems, Scaramella said. Hosting companies, data center operators, cloud hosting providers and Web services firms make up a major market for Dell, he added.
Dell moved into the microserver market early, touting the technology because it contends that Wall Street measures hosting providers by the amount of revenue generated per square foot of data center space. Up to 12 microservers can be put into a 3-U rack.
For enterprise vendors, HP and IBM in particular, they still have a majority of the world's market share, but it was a rough quarter. HP was at 26.9% market share in the first quarter, compared to 29.2% in the year ago fiscal period.
Similarly, IBM dropped to 25.5% from 27.2% in the quarter.
First quarter server sales are typically weak, as buyers slow down after a year-end ordering rush. The Unix market, important to both IBM and HP, declined in revenue by nearly 36% in the first quarter.
Scaramella said the server market is growing overall, calling the first quarter decline a seasonal one. He projects mid-single digit growth in the coming quarters.
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His email address is email@example.com.
- Microsoft's new CEO and his first-100-days plan
- Personal history may thrust new Microsoft CEO into visa debate
- As Dell cuts, Apple adds jobs in Austin
- Dell cuts 'small percentage' of workforce
- Lenovo's Motorola, IBM server buys will likely get strict U.S. security review
- Welcome to the era of radical innovation
- China passes Japan to become world's 2nd largest IT market
- BlackBerry sale might not include smartphones
- Tech hiring accounts for 10% of U.S. employment gains
- Gartner offers more data on PC decline and tablet surge
Read more about Servers in Computerworld's Servers Topic Center.
- Best iPhone, iPad Business Apps for 2014
- 14 Tech Conventions You Should Attend in 2014
- 10 Desktop Apps to Power Your Windows PC
- How to Add New Job Skills Without Going Back to School
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- ESG: IBM x3650 M4 BD: System x Server for Big Data Analytics The paper discusses the rise of Big Data and the importance of analytics for rapidly extracting insights from this data for improved business...
- IDC: Enterprise Workloads on The IBM X6 Portfolio: Driving Business Advantages This paper shows how the new IBM systems with X6 technology were designed to take clients to a new frontier of x86 computing.
- Driving Innovation in the Banking Industry: Cutting Edge Computing Platforms Make a Difference Analyst Report to show the benefits of the new IBM X6 in the banking industry.
Red Hat Enterprise Linux - The Original Cloud Operating System
Linux adoption is growing against a number of measures, such as the
number of supercomputers that run Linux and the size of the contributing...
- Webinar: Building a Big Data solution that's production-ready Big data solutions are no longer just a nice-to-have.
- Meg Whitman presents Unlocking IT with Big Data During this Web Event you will hear Meg Whitman, President and CEO, HP discuss HAVEn - the #1 Big Data platform, as well... All Servers White Papers | Webcasts