IBM Takes the Lead From HP in Server Revenue: Gartner

IBM rose and Hewlett-Packard fell in a worldwide server market that grew in both shipments and revenue in the third quarter, according to market research firm Gartner.

According to numbers released Nov. 28, IBM surged to the forefront of server revenue in the quarter, generating more than $3.84 billion, a 3.5 percent jump over the same period last year. Meanwhile, rival HP, which had held the top spot during the third quarter in 2010, saw its revenue drop 3.6 percent, from more than $3.94 billion last year to $3.8 billion in Q3 2011.

IBM grew its market share to 29.7 percent, edging HP and its 29.3 percent of the space. The analysts said that the bulk of IBM’s revenue growth came from its Power Systems portfolio, with some help from its System x servers, which are powered by x86-based processors from Intel and Advanced Micro Devices.

Dell at No. 3 and Fujitsu at No. 4 also saw their server revenue grow–6.3 percent and 3.6 percent, respectively–while revenue for Oracle, in fourth, remained steady, with a slight increase. Dell held 14.5 percent of the market based on revenue, while Oracle had 6.2 percent and Fujitsu 4.7 percent.

Overall, server revenue around the globe grew 5.2 percent, to more than $12.3 billion, according to Gartner’s numbers. Growth varied significantly from region to region, Gartner Research Vice President Jeffrey Hewitt said.

“All regions showed growth in both shipments and vendor revenue except for Western Europe, which posted a 4.9 percent decline in revenue for the period,” Hewitt said in a statement. “Asia/Pacific grew the most significantly in shipments, with a 23.9 percent increase. Eastern Europe posted the highest vendor revenue growth at 27.4 percent for the period.”

HP, despite seeing a 3.1 percent drop in the number of servers it shipped, was still No. 1 in that category, with a 29.2 percent market share. Dell, at 21.8 percent market share, and IBM at 12.1 percent, were second and third in server shipments, followed by Fujitsu and Lenovo. Gartner analysts said HP’s numbers were due in large part to slowing shipments of its x86-based ProLiant servers.

HP executives have said that its high-end server business, with systems based on Intel’s Itanium processors, also is struggling. On Nov. 21, they reported that revenue for HP’s Business Critical Systems group fell 23 percent during the company’s fiscal fourth quarter, with CEO Meg Whitman reportedly admitting HP’s BCS business is in a slow decline and that the company needs make its way to a new platform.  Part of that decline has been due to Oracle’s decision in March to end software development for the Itanium platform, a move that generated a strong rebuke from Intel and a lawsuit from HP.

To read the original eWeek article, click here: IBM Overtakes HP in Server Revenue: Gartner

CIO Insight Staff
CIO Insight Staff
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