Servers

IBM Shines in Strong Q2 Server Market

IBM's worldwide server revenue jumped a healthy 24.5 percent in the second quarter, putting it neck and neck with Hewlett-Packard for the top spot, IDC reported Tuesday.

Helped by a surge in mainframe sales, IBM's revenue climbed to just over US$4 billion in the quarter, giving it 30.5 percent of the overall market. HP's sales climbed a more modest 9.3 percent, to $3.9 billion, for 29.8 percent of the market. IBM crowed that it had recaptured the server crown, but IDC declared it "a statistical tie."

Server sales were strong overall, with worldwide revenue climbing 18 percent from a year earlier to $13.2 billion, IDC said. Unit shipments were 2.1 million, the second-highest total ever reported for a June quarter. The highest was in 2008, just before the economy went south.

"These numbers were actually slightly better than we were expecting," said IDC analyst Jed Scaramella.

Recent Unix upgrades from HP, IBM and Oracle helped lift the results, as did new mainframes from IBM. In addition, companies that put off buying new gear during the recession finally had to make purchases, IDC said.

The second half of the year won't be so rosy, however. The refresh cycles are starting to dry up and "weakening macroeconomic concerns around the world will serve to moderate demand for servers later this year," IDC said in a statement.

The research firm predicts "a soft landing" for the server market in the second half, Scaramella said.

Still, for now business was brisk in all segments. Sales of volume systems, which by IDC's definition cost less than $25,000, were up 17 percent from a year earlier, while sales of midrange systems, priced from $25,000 to $250,000, were up by the same amount. Sales of high-end systems -- those priced above $250,000 -- climbed 23 percent, IDC said.

The high-end sales undoubtedly were helped by IBM's System z mainframe sales, which were up 61 percent from a year earlier, to $1.2 billion. Blades also performed well, with revenue up 27 percent year over year, IDC said.

All vendors saw their server revenue increase from a year earlier. Fujitsu, the smallest of the top five vendors, saw its revenue more than double, largely thanks to the K-computer high-performance computing system in Japan. It finished the quarter with 6.5 percent market share, in a statistical tie with Oracle, whose sales increased just 4.2 percent.

Dell's server sales increased by 5.1 percent, IDC said, putting it in the middle of the pack with revenue of $1.8 billion.

"This was the fifth consecutive quarter with double-digit year-over-year revenue growth, as the market recovery continued to extend from x86 servers to midrange Unix to high-end mainframe class systems," IDC analyst Matt Eastwood said in a statement.

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

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