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Server makers shift more boxes than cash in Q2

Dell and Sun make gains

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Strong sales of small one- and two-processor systems again pushed the overall server market higher in the second quarter, according to the latest data from Gartner. Total server sales hit $11.5bn in the period - a year-over-year rise of 7.7 percent. Dell enjoyed its familiar position as the fastest growing vendor, and IBM held onto its lead in overall sales. One surprise in the quarter came courtesy of Sun Microsystems, which showed the strongest uptick in units shipped of any vendor.

"Overall, each region showed positive year-over-year growth in terms of revenue," said Mike McLaughlin, principal analyst for Gartner. "We also saw increased activity in the x86-64 market, as well as continued strong sales in the low-end server market."

In total, revenue figures for the top tier vendors improved only slightly even though there was a significant increase in units shipped. This has been the trend for some time, as large customers still appear to be shying away from purchasing larger, expensive systems.

IBM moved $3.5bn worth of servers in the quarter up from $3.2bn in the same period last year. HP took the second spot with modest 4 percent growth, hitting $3.2bn in sales. Sun captured the third position with $1.5bn in sales up from $1.46 the year before. Dell posted a healthy 20 percent growth up to $1.1bn from $944m, as it edges ever closer to Sun for the third spot. Fujitsu rounded out the top five with $518m in sales up from $484m. All of the major vendors posted strong unit shipment increases during the period. All told, the vendors moved 1.6m units up from the 1.3m shipped last year.

HP's strong ProLiant server business again carried it to the leading position in total shipments. HP moved 463,000 boxes as compared to 377,000 last year. Dell grew at a slightly faster clip - 29 percent - to move 337,000 systems. IBM had the slowest growth among the top four vendors at 19 percent and shipped 238,000 boxes. Sun's shipments increased a whopping 38 percent to 90,000 units from 65,000 last year.

"The past several quarters Dell has experienced the strongest growth rate among the top-tier vendors, however Sun exhibited the highest growth rate (this quarter)," Gartner said. "Sun benefited from an increase in demand from the telco sector for their Netra product line, as well as increased sales of high-end servers to the financial sector."

Sun must be pleased to see its core telco and financial server markets come back. But, while shipments increased dramatically, Sun's revenue total barely moved, confirming the notion that the good, high-margin times have passed. Fujitsu again took the fifth spot with 17 percent growth and 47,000 boxes shipped.

We'll break out the processor numbers when the data rolls in from Gartner. ®

Related stories

Sun salutes Microsoft for delivering Q4 profit
HP maps growth path
Intel's Itanium rockets to 64-bit shipment lead
Life support kicks in for server makers in Q2

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