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.
- How a private Dell works with customers, and sees its rivals
- Update: SanDisk agrees to pay $1.1 billion flash storage maker Fusion-io
- CompTIA now offers its research without charge
- 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
Read more about Servers in Computerworld's Servers Topic Center.
- 5 Customers Deliver Virtual Desktops and Apps to Empower a Modern Workforce Learn how Citrix solutions helped 5 companies realize the full value of desktop virtualization through a project-by-project approach based on key business priorities.
- Top 10 Reasons to Strengthen Information Security with Desktop Virtualization Regain control and reduce risk without sacrificing business productivity and growth
- IDC MarketScape: Worldwide Client Virtualization Software 2013 Vendor Assessment IDC has placed Citrix in the 2013 IDC MarketScape Leaders Category once again noting that, "Citrix's position reflects the company's market leadership and...
- Infographic: Top Use Cases for Desktop Virtualization A wide range of business issues is driving IT toward desktop virtualization. One solution-Citrix XenDesktop with FlexCast technology-helps IT teams empower their entire...
- What Does it Take to Deliver a Superior Customer Experience? The Two Top-Rated Online Retailers, B&H Photo and Crutchfield Electronics, Share Their Secrets Discuss practical CX tools and service methods such as contact center agents and the use of realtime speech analytics to help contact center...
- Keep Servers Up and Running and Attackers in the Dark An SSL/TLS handshake requires at least 10 times more processing power on a server than on the client. SSL renegotiation attacks can readily... All Servers White Papers | Webcasts