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IBM #1 in server market, followed by HP, Dell

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CIOL Bureau
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BANGALORE, INDIA: IBM leads the worldwide server market, based on revenue in the fourth quarter of 2010, finds market analyst firm Gartner in its latest report.

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The company ended the year with $5.2 billion in revenue for the fourth quarter of 2010 accounting for 35.5 percent of worldwide server revenue. This was up 2.8 percent, compared with the fourth quarter of 2009. IBM's growth was fueled by its System Z and System X product lines.

Also Read: Fujitsu x86 server revenues grow 227pc

Of the top five global vendors, IBM, HP and Dell delivered double-digit growth rates in terms of revenue, while Oracle and Fujitsu experienced revenue declines in the fourth quarter of 2010.

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Table 1

Worldwide: Server Vendor Revenue Estimates, 4Q10 (U.S. Dollars)

Company

4Q10

Revenue

4Q10 Market Share (%)

4Q09

Revenue

4Q09 Market Share (%)

4Q09-4Q10 Growth (%)

IBM

5,213,930,594

35.5

4,125,145,125

32.7

26.4

HP

4,457,791,867

30.4

3,951,339,524

31.3

12.8

Dell

1,920,161,049

13.1

1,519,699,047

12.1

26.4

Oracle

805,582,264

5.5

960,830,493

7.6

-16.2

Fujitsu

560,391,957

3.8

563,384,642

4.5

-0.5

Other Vendors

1,720,448,653

11.7

1,486,168,259

11.8

15.8

Total

14,678,306,384

100.0

12,606,567,089

100.0

16.4

Source: Gartner (February 2011)

Putting the final touches on a year of worldwide server market growth, fourth quarter 2010 worldwide server shipments grew 6.5 percent year on year, while revenue climbed 16.4 percent, adds Gartner.

"2010 was a year that saw pent-up x86-based server demand produce some significant growth on a worldwide level," said Jeffrey Hewitt, research vice president, Gartner. "The introduction of new processors from Intel and AMD toward the end of 2009 helped fuel a pretty significant replacement cycle of servers that had been maintained in place during the economic downturn in 2009."

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From a geographic perspective, all regions, with the exception of Japan, grew in revenue with the three highest growth rates shown by North America (24.5 percent), Asia/Pacific (22.4 percent) and Latin America (12.3 percent). Europe, Middle East and Africa (EMEA) grew by 10.4 percent and Japan declined by 4.4 percent.

"Ongoing blade server growth and the introduction of 'skinless' servers in the x86 segment also helped push 2010 results into double-digit growth rates, despite ongoing constraints in RISC/Itanium Unix platforms. The introduction of new mainframe platforms from IBM helped to drive increases in the mainframe segment with 68.3 percent revenue growth of IBM's System Z platforms in the fourth quarter," Hewitt said.

In server shipments, HP remained the worldwide leader for the fourth quarter of 2010 (see Table 2) with a year-on-year shipment increase of 6.9 percent.

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The results for the quarter were centered around x86 server demand, which increased in shipments by 7.1 percent and revenue by 20.0 percent for the fourth quarter of 2010.

Table 2

Worldwide: Server Vendor Shipments Estimates, 4Q10 (Units)

Company

4Q10

Shipments

4Q10 Market Share (%)

4Q09

Shipments

4Q09 Market Share (%)

4Q09-4Q10 Growth (%)

HP

767,026

32.2

717,212

32.1

6.9

Dell

515,274

21.6

484,702

21.7

6.3

IBM

332,254

14.0

320,007

14.3

3.8

Fujitsu

75,716

3.2

67,391

3.0

12.4

Oracle

36,614

1.5

61,866

2.8

-40.8

Other Vendors

654,544

27.5

584,007

26.1

12.1

Total

2,381,428

100.0

2,235,185

100.0

6.5

Source: Gartner (February 2011)

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Full Year 2010 Server Market Results

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2010 marked a return to growth with increases of 16.8 percent in worldwide server shipments and 13.2 percent in revenue. These results were fueled primarily by a replacement of aging x86 servers, which had been maintained through the economic doldrums of 2009.

Some cloud-related build-out is also likely to have fueled increases, particularly in North America, while emerging regions, such as Asia/Pacific and Latin America, also added to the growth for the year.

Blade servers posted a revenue increase of 29.5 percent and a shipment increase of 12.6 percent for the year. HP was the 2010 leader in blade shipments with 47.3 percent share, followed by IBM with 25.4 percent share. These two vendors continued to dominate this form factor, although Dell also saw a modest share increase, and Cisco achieved a low, single-digit share in its first full year in the server market.

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The outlook for 2011 suggests that growth will continue, but at lower levels, because the highest level of the replacement cycle for x86 servers was probably reached in 2010. These increases continue to be buffered by the use of x86 server virtualization to consolidate physical machines as they are replaced.

HP and IBM are tussling for outright market leadership as both vendors achieved revenues of over $15 billion for 2010, both with a market share of 31 percent. HP achieved a stronger year on year growth rate of 18.9 percent to IBM’s 9.2 percent.

HP has demonstrated strength with the results of its x86 ProLiant line all year, although IBM’s System Z line was key in its improved results in the fourth quarter. 2011 will be a critical year in determining which of the relative strengths of these two leading vendors are best aligned to the market direction.

Table 3

Worldwide: Server Vendor Revenue Estimates, 2010 (U.S. Dollars)

Company

2010

Revenue

2010 Market Share (%)

2009

Revenue

2009 Market Share (%)

2009-2010 Growth (%)

HP

15,332,765,040

31.4

12,892,126,551

29.9

18.9

IBM

15,045,308,591

30.8

13,771,714,540

32.0

9.2

Dell

7,187,356,464

14.7

5,472,746,063

12.7

31.3

Oracle

3,095,981,831

6.3

3,762,609,892

8.7

-17.7

Fujitsu

2,141,541,849

4.4

2,037,072,203

4.7

5.1

Other Vendors

5,990,286,849

12.3

5,149,979,775

12.0

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