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Global server revenue grows by 19.5%: Report

SearchCIO.in Staff

The global server sales in the second quarter of 2011 grew by 8% year on year (y-o-y), while revenue rose by 19.5% y-o-y, according to Gartner, Inc.

“The second quarter produced solid growth on a yearly basis, as the recovery that started in 2010 continues to eke out slow improvements,” comments Jeffrey Hewitt, research vice president at Gartner. “All regions showed yearly growth in shipments and vendor revenue. However, the market is below the pre-downturn levels in both measures than in the corresponding quarter of 2008.”

Unit sales of x86 servers grew by 8.4% and their  revenues grew by 17.7%. RISC/Itanium Unix servers declined by 8.5% in unit terms but exhibited a turnover hike of 4.3% vis-a-vis Q2-2010. “The ‘other’ CPU category, which is primarily mainframes, showed a strong growth of 48.8%," Hewitt says.

Region-wise performance

Amongst regions, the Asia Pacific witnessed a volume growth of 25.6%. Japan posted the highest vendor-revenue growth of 59.5%. All of the top five worldwide server manufacturers showed growth in their turnover figures in Q2. Hewlett-Packard led global server space based on revenue posting more than $3.9 billion in sales, thus controlling 29.8% revenue-share (down by 2.2% y-o-y).

The server shipments in Middle East and Africa (EMEA) crossed 6.11 lakh units Q2-2011, a 5% y-o-y increase. The revenue aggregated $3.69 billion in Q2, representing a 15.2% hike.

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“Against a backdrop of ongoing economic concerns, the server market continues to recover across the EMEA regions,” comments Adrian O’Connell, research director at Gartner. “Revenue growth outpacing shipment growth shows the strength in some high-end platforms, which, having longer sales cycles, have taken longer to return to growth mode.”

O’Connell adds: “The current growth rates look positive; but in absolute terms, the market remains below the levels that we saw prior to the downturn. Total server revenue across EMEA is only just over three quarters of the level that it was in Q2-2008. The RISC/ Itanium Unix and Other CPU systems are worse — about 50% of the pre-downturn levels. There is a need for vendors to focus on driving competitive wins to maximize the available market opportunity, particularly in non-x86 segments.”

How top vendors stack up

In Q2-2011, all of the top five vendors excluding Dell showed revenue hikes. HP was ranked as the topper with its revenue increasing by 12%. IBM followed with a 30% growth y-o-y. Dell’s growth was marred by slow uptake in public sector.

Server vendor performance by revenue: Q2-2011 (In US$)

Company

Q2-11

Revenue

Q2-11 Market Share (%)

Q2-10

Revenue

Q2-10 Market Share (%)

Q2-10-Q2-11 Growth (%)

HP

3,947,063,788

29.8

3,542,849,414

32.0

11.4

IBM

3,793,719,541

28.7

3,061,867,209

27.6

23.9

Dell

1,882,518,660

14.2

1,803,984,658

16.3

4.4

Oracle

936,121,906

7.1

928,500,001

8.4

0.8

Fujitsu

836,980,487

6.3

353,605,651

3.2

136.7

Other Vendors

1,844,894,373

13.9

1,393,266,013

12.6

32.4

Total

13,241,298,756

100.0

11,084,072,945

100.0

19.5

Source: Gartner

HP won the top honors even by the global server unit sales in Q2-2011 posting a sales volume rise of 11.7% y-o-y. This growth was influenced primarily by its ProLiant servers. The vendor’s global server market share was 30.8% (increase by 1%). All top five vendors excluding Dell witnessed growth in unit sales in Q2-2011.

Technology trends

From technology point of view, x86-based servers and blades grew by 8.2% in unit sales and 29.5% in turnover. The sales of rack-optimized servers grew by 8.9% in units and 17% in revenue.

The second quarter of 2011 saw turnover increase across segments. X86 systems grew by 16.2%, the ‘Other’ CPU category, largely driven by the IBM System Z platform, grew by 36.2% and RISC/Itanium Unix systems grew by 2.1%.

Overall, RISC and Itanium Unix revenues grew by 2.1% in Q2-2011. X86 revenue grew by 16.2%. IBM led the segment with 21.9% growth. Its share grew to 43.9%. Oracle’s revenues declined by 16.1%.

“The Unix category looks squeezed between x86 and mainframes. IBM is the best-performing vendor in this consolidated segment with Oracle and HP struggling to improve business results,” O’Connell says.

Server vendor performance (Units): Q2-2011

Company

Q2-11

Shipments

Q2-11 Market Share (%)

Q2-10

Shipments

Q2-10 Market Share (%)

Q2-10-Q2-11 Growth (%)

HP

719,590

30.8

644,172

29.8

11.7

Dell

511,507

21.9

542,799

25.1

-5.8

IBM

273,718

11.7

267,614

12.4

2.3

Fujitsu

71,848

3.1

60,974

2.8

17.8

Lenovo

36,220

1.6

24,835

1.2

45.8

Other Vendors

719,963

30.9

618,753

28.7

16.4

Total

2,332,846

100.0

2,159,147

100.0

8.0

Source: Gartner