Sun stuns server market in Q1 with sales spike

IBM and HP hold, while Dell drops

By Ashlee Vance in Mountain View • Get more from this author

Posted in Servers, 24th May 2006 18:55 GMT

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The server market was slapped and dropped on its head during the first quarter of 2006. We haven't seen anything quite like it since 2000.

What's the big shocker? Well, Sun Microsystems actually enjoyed one of the stronger runs during the first quarter by most metrics, while Dell proved one of the worst performers. Beyond the server vendor rumbles, AMD continued to gain gobs of share on Intel in the x86 processor market.

Now to the numbers courtesy of the good people at Gartner.

The total worldwide server market was as flat as Thomas Friedman during the first quarter with sales coming in at $12.3bn. Shipments jumped up 14 per cent, as all vendors combined to move 2m boxes. IBM remained the revenue leader, while HP held on as the shipments king.

Sellers of x86 systems continue to benefit from a trend toward smaller boxes, which explains the rise in shipments and flat overall revenue.

IBM showed the strongest growth in shipments with sales rising 19 per cent. In a true shocker, Sun followed with 8.1 per cent growth, HP showed 8 per cent growth, Dell showed 7 per cent growth and Fujitsu posted 5 per cent growth.

On the revenue front, Sun made by far the most significant gains. Sun's server revenue surged 8 per cent, while HP was flat. IBM saw revenue slide 4 per cent, and Dell posted a 2 per cent drop in revenue. Fujistu stumbled in a big way, dropping 14 per cent.

"Sun Microsystems returned to server revenue growth for the first time in almost two years, driven by increases in its UltraSPARC and its Opteron-based server revenue," Gartner said. "Dell, on the other hand, while posting a 7.1 percent shipment growth for the quarter, suffered an atypical revenue drop of 2 percent for the period."

Sun regained its position as the big-iron leader, as it grew sales, while HP, IBM and Fujitsu dropped sales. Sun now accounts for more than 50 per cent of Unix/Itanium shipments and 32 per cent of big-iron revenue. HP and IBM follow with 30 per cent revenue share each.

In the x86 server market, AMD continued to show momentum. In last year's first quarter, it held 6 per cent of the worldwide market. This time around, it grabbed 15 per cent of the market. The most dramatic gain for AMD came in the US four-socket section of the server market where it rose from 23 per cent share to 48 per cent share. That helps explain why Dell gave in and embraced AMD on the four-socket front.

As usual, we'll be posting Itanium breakouts when they arrive from Gartner. ®

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