Dell Gains, Sun Loses in Worldwide Server Market

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Dell posted the biggest gains in worldwide server revenue in the second quarter, helping it to nudge Sun Microsystems out of third place, Gartner said Thursday.

IBM retained the top spot but had slower revenue growth than Dell, while Hewlett-Packard stayed in second place with hardly any growth at all, according to Gartner's estimates.

Dell's server revenue climbed an impressive 15 percent from the second quarter last year, compared with 11.5 percent growth for IBM and 2.9 percent growth for HP, Gartner said. Sun's revenue declined 6.8 percent while Fujitsu/Fujitsu Siemens stayed flat.

Dell made the most of an upswing in x86 server replacements during the quarter, which was the biggest driver for the market as a whole, according to Gartner. Sales were also lifted by data center build outs and growth in emerging markets.

Server revenue overall grew 5.7 percent from the second quarter last year, to $13.8 billion, which Gartner called a solid performance given the economic woes in the U.S. and elsewhere.

The results looked different in terms of server units shipped. HP led by that measure with about 30 percent of the market, down slightly from last year. Dell came second with 22.3 percent and IBM was third with 13.2 percent, Gartner said.

IBM's Unix servers sell in relatively small volumes but at higher prices than x86 systems, which explains why it came first in revenue but third in shipments. Sun and Fujitsu took fourth and fifth place, growing server unit shipments 1.6 percent and 3.3 percent, respectively.

Unit shipments of servers based on Intel's Itanium processor fell 7.9 percent, although revenue climbed 9.4 percent, meaning higher-end systems are driving the sales of Itanium servers, Gartner said.

Overall the vendors sold 2.3 million servers during the quarter, up 12 percent from the same period in 2006.

Worldwide Server Vendor Revenue Estimates, 2Q08, (U.S. Dollars) (Source: Gartner)

Company 2Q08 Revenue 2Q08 Market Share (%) 2Q07 Revenue 2Q07 Market Share (%) 2Q07-2Q08 Growth (%)

IBM 4,315,049,933 31.2 3,870,937,408 29.6 11.5

Hewlett-Packard 3,811,555,998 27.6 3,703,108,934 28.4 2.9

Dell 1,795,295,686 13.0 1,561,405,756 12.0 15.0

Sun Microsystems 1,633,955,195 11.8 1,753,434,866 13.4 -6.8

Fujitsu/Fujitsu Siemens 492,821,856 3.6 493,498,046 3.8 -0.1

Other vendors 1,761,944,639 12.8 1,678,799,374 12.9 5.0

Total 13,810,623,307 100.0 13,061,184,384 100.0 5.7

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