Gartner: Server Sales Kept Bouncing Back in Q4

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Worldwide server revenue and unit shipments continued a yearlong recovery in the fourth quarter of 2010, but growth is likely to slow this year, research company Gartner said on Thursday.

Revenue for all types of servers grew 16.4 percent from a year earlier, while the number of servers delivered grew 6.5 percent in the quarter, Gartner said. The company cited the replacement of x86 servers that companies had held on to through the global recession in 2009, as well as the introduction of the Nehalem family of processors from Intel and new Opteron chips from AMD late in 2009.

Gartner believes the replacement of x86 servers following the economic downturn has passed its peak and will slow this year.

IBM led the industry in revenue for the quarter, with a US$5.2 billion in sales, or 35.5 percent of the market. Sales of System X and mainframe System Z platforms helped IBM during the quarter, with the System Z line showing a 68.3 percent increase in revenue, according to Gartner.

HP came in behind IBM for revenue, with 30.4 percent of the market, but led in unit shipments for the quarter, delivering 767,026 servers or 32.2 percent of the total. Dell was the second-biggest vendor by shipments in the quarter, with 515,274 or 21.6 percent of the industry total. Dell was also the third-biggest company in revenue.

Oracle suffered a 40.8 percent drop in shipments and a 16.2 percent decline in server revenue from last year's fourth quarter, when its server business was still owned by Sun Microsystems. Cisco Systems, in its first full year of shipping servers after the introduction of its Unified Computing System in 2009, earned a market share in the low single digits, Gartner said.

Server revenue increased from a year earlier in all areas of the world except Japan, which saw a 4.4 percent drop in the quarter. North America led the gains, with a 24.5 percent increase from a year earlier, followed by Asia-Pacific with 22.4 percent and Latin America with 12.3 percent. Europe, Middle East and Africa registered a 10.4 percent gain in server revenue.

Servers built around x86 processors dominated the market, representing about 97 percent of all shipments in the quarter, and grew by 7.1 percent in shipments and 20.0 percent in revenue, according to Gartner.

Blade servers shot up 29.5 percent in revenue and 12.6 percent in shipments in 2010. By the fourth quarter, they made up about 14 percent of the total server market, said Gartner analyst Jeffrey Hewitt.

For the full year, revenue grew 13.2 percent and shipments increased 16.8 percent. HP led the market by a hair with $15.3 billion in revenue, up almost 19 percent from 2009. IBM followed with just over $15 billion in revenue, up 9.2 percent. Both had about 31 percent of the market in 2010.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is

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