Gartner: Q2 server shipments rise on Sun, Dell strength

They gained market share as HP and IBM slipped

Server shipments and revenue increased in the second quarter as Sun Microsystems Inc. and Dell Inc. gained market share at the expense of Hewlett-Packard Co. and IBM, according to research released by Gartner Inc. today.

Worldwide shipments totaled 1.6 million units, up 24.5% from the second quarter of 2003. Every region of the world posted a revenue increase compared with last year, Gartner said.

Low-cost servers based on Linux or Microsoft Corp.'s Windows operating system continue to grow faster than their Unix counterparts, a trend that has been evident for several quarters. Linux server shipments grew 61.6%, while revenue from Linux servers grew 54.6%, Gartner said.

Servers based on Intel Corp.'s Xeon processors still dominate the low-cost market, although Advanced Micro Devices Inc.'s Opteron processor has received a lot of attention over the past year. Both companies now ship processors based on the widely used x86 instruction set that have both 32- and 64-bit capabilities.

That market grew a whopping 2,183% compared with last year's second quarter, when only IBM was shipping an Opteron server, Gartner said. Revenue from 32-bit x86 servers grew 10%, while revenue from Unix servers fell 4%.

HP shipped 463,489 servers to lead all vendors in the second quarter. Its shipments grew 22.7%, but rival Dell's shipments grew faster, and HP lost a little ground to Dell in the quarter. HP's server unit is coming off a disastrous second quarter in which revenue declined 5%, costing three executives their jobs (see story).

IBM shipped 238,721 servers in the quarter, an increase of 18.5%, but it also lost some market share. Sun shipped 90,487 servers in the quarter for an increase of 38.4%, the largest increase posted by any vendor.

Sun sold more of its Netra servers to the telecommunications industry in the past quarter and also won more business for its high-end Unix servers at financial customers, Gartner said.

Fujitsu Ltd. and Fujitsu Siemens Computers rounded out Gartner's list with shipments of 47,072 servers, an increase of 17.7%.

All server vendors combined to rake in $11.5 billion in revenue during the quarter, up 7.7%. IBM, HP and Sun led the way due to the expensive Unix servers that each company still ships. Dell's product line is focused on less expensive one-way to four-way servers based on Intel's chips.

Copyright © 2004 IDG Communications, Inc.

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