Worldwide server shipments in the third quarter totaled 2.2 million units, an 8.7 percent increase in comparison with the year-earlier period,
analysts said. Moreover, server revenue rose by 2.6 percent to $13.4 billion in the quarter, driven by demand for x86-based systems.
The difference between the third quarter's revenue and volume growth numbers is primarily due to a shift in mainframe activity, noted Gartner principal analyst Lillian Avarado. "Unix and x86 servers had higher revenues than you see overall because the total statistic is influenced by mainframe sales," which soared in last year's third and fourth quarters.
"We are seeing strong server demand, though U.S. growth is lower than in other regions, which are being helped by the weak dollar," Alvarado explained. "And we have the emerging markets, which are still growing strong."
Server Market Leaders
IBM continued to lead the field with respect to worldwide server revenue. According to Gartner's latest figures, Big Blue's System z mainframe led servers priced at $250,000 or more with a 31 percent worldwide revenue share in the latest quarter. "IBM introduced its System z servers in the second half of last year, so it had a huge revenue increase in those two quarters," Alvarado explained. But since then, mainframe sales have returned "to more normal patterns."
Hewlett-Packard, which retained its No. 1 position with respect to worldwide server shipments, racked up the most dramatic quarterly gains. Server unit shipments grew by 20.2 percent year-over-year, giving the company a 26.5 percent market share. In particular, Gartner said HP was able to cut into IBM's lead in server revenue by making important gains in the market segment centered on pricey, upscale servers.
The investments HP has been making in its account coverage and go-to-market activities finally appear to be paying off. "When you look at what we call business critical systems (BCS), we spent a lot of time getting ISVs Independent Service Vendors) ported, and we're now up to over 13,000," HP CEO Mark Hurd told financial analysts last week.
Steady Blade Growth
Worldwide blade server shipments in the third quarter grew by 13.8 percent. HP, which saw its blade server shipments rise by an impressive 91 percent in comparison with the year-ago period, easily retained the top spot in this segment.
Sun Microsystems, which elected to reenter the server blade market in 2006, moved up from the No. 9 spot to become the fourth largest blade server vendor in the third quarter. "We have seen quadruple digit growth in our blade business," noted Sun's blades server product line director Mike McNerney. "Blades are a priority platform for Sun, and we are developing blade solutions across the entire product family," he said.
According to McNerney, two key factors have driven blade growth at Sun. The first, he said, is having a complete and comprehensive portfolio of blade products spanning UltraSPARC, AMD Opteron, and Xeon platforms. The second is offering a truly differentiated and open blade architecture with systems density, memory footprint, and I/O capacity, he added.