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Dell becoming ‘the 800lb gorilla’ of the server market

Sells more servers in US than Big Q during Q1

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Dell saw almost 50 per cent growth in worldwide server shipments during the first quarter, and overtook Compaq as the top server seller in the US.

Big Q remains the world's biggest supplier of Intel platform servers. S hipments rose 13 per cent to 234,000 units, giving it 29 per cent of the market in Q1, according to Gartner Dataquest. The overall market for PC Intel-based servers grew 28 per cent to 810,000 shipments.

Dell was the second biggest server vendor, with sales growing 47 per cent to 174,000 units giving it 21.6 per cent market share.

IBM and Hewlett-Packard sold 174,000 and 113,000 servers respectively, giving them 21.6 per cent and 13.9 per cent market share. Their shipments grew 18 per cent and 36 per cent.

NEC had 3.7 per cent of the market with shipments up three per cent to 29,000.

In the US, Compaq lost its lead to Dell, which sold 94,000 servers and grabbed 38.3 per cent of the market. Compaq sold 79,000 units, giving it 32 per cent market share. This was a switch from Q1 2000, when Compaq had 38 per cent and Dell 28 per cent of the market.

IBM shipments totalled 31,000 in the US in Q1, or 12 per cent market share, while HP and Gateway nabbed 19,000 (eight per cent) and 5,000 (two per cent) respectively.

"Dell very consciously decided to take corporate gross margin down from 21 per cent to 18 per cent this year," said Todd Kort, principal analyst at Gartner Dataquest. They said to everyone: We're putting the heat on. See if you can follow."

According to Kort, Dell is sacrificing profitability in the short time, which is an "effective strategy and pays well in this particular period of time". But this will have a knock on effect on rivals. "If Dell lays off a few people, bigger companies have to lay off more," said Kort.

"It is becoming the 800-pound gorilla of the server market," he added.

In Western Europe, Compaq held onto its lead during the quarter, with 91,000 shipments giving it 37 per cent of the market. Dell had 39,000 sales, 16 per cent, HP 34,000 (14 per cent), IBM 33,000 (13 per cent) and Fujitsu Siemens 25,000 (ten per cent). Total server sales in Western Europe were 249,000. ®

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