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IDC: Q3 server sales were crap

But not as crap as 2001

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Windows Trumps Unix

Now, back here in reality in the third quarter of 2008, Windows trumps Unix unless you count Linux as a kind of Unix (which I do for spiritual and cultural purposes). In Q3, IDC believes that server makers kicked out $5.1bn in Windows machines, a decline of 5.1 per cent and giving Windows a 40.8 per cent of the global server pie in the quarter. Unix, which is mostly a midrange and high-end play these days, accounted for $3.7bn in sales, down 8 per cent and giving Unix a 29.7 per cent share of the pie. Linux server sales fell by 2.5 per cent to $1.8bn in the quarter, giving Linux boxes a 14 per cent share.

If you add Unix and Linux together to feel better about competition for Windows, then Uni(linu)x won this quarter, comprising $5.5bn in sales. But it was a squeaker, and the combined based declined by 6.5 per cent, which is a steeper drop-off compared to the Winders platform. Other boxes - and notably IBM's System z mainframes, which are enjoying an upgrade cycle to the new z10 quad-core machines - accounted for the remaining sales couple billion dollars in sales. IBM's System z mainframe saw a revenue bump of 24.8 per cent in Q3 2008.

IDC's stats, like the data coming out of Gartner, show that the x64 server market took it hard on the chin in Q3. (But as you can see from the above comparison, nothing at all like Q3 2001). x64 server sales dropped by 6.6 per cent in the third quarter of 2008 to $6.9bn - the largest decline in six years. x64 server sales in the United States were off 12.2 per cent, the worst decline since 2001, and all regions except Latin America have x64 server sales declines.

Latin America, a tiny but growing slice of the server market, had a stunning 12.8 per cent revenue spike. (While this is wonderful, considering that the United States and Western Europe are in recession and we are all connected economically in this silly old world, how long can Latin America remain a bright spot?) IDC said that x64 server buyers were cutting back on configurations and were also shopping based on price, which drove down sales.

IDC likes to break out numbers for blade servers, which as we all know should account for more of the server market than they do. (Well, if you believe all the benefits that vendors espouse). Blade sales rose by 29.5 per cent in the quarter across all processor architectures to $1.4bn, accounting for 11 per cent of global server sales in Q3. Blades were expected to have two to three times this share by now when they hit the market in early 2000.

Hewlett-Packard's blades continue to beat out IBM, which was trouncing HP a few years back. HP had 55.5 per cent revenue growth in Q3 (OK, that is a pretty juicy number), garnering 54.7 per cent of the blade revenue pie. IBM, by contrast, had a 7 per cent revenue decline and only took 22.9 per cent share. Dell had 70 per cent revenue growth in the quarter with blades, but is starting from a small number and still has only 9.3 per cent of sales.

The box counters at IDC also like to talk publicly about how sales of servers are doing for various price bands. The so-called volume server segment - machines that cost less than $25,000 - had a 7.2 per cent decline, and the first decline for this segment in 14 quarters. Midrange boxes (which sell for $25,000 to $500,000) had a 9.5 per cent revenue decline, while high-end boxes costing more than $500,000 saw a revenue bump of 4 per cent (thanks in large part to IBM's mainframes).

While Gartner pegs IBM as the server revenue leader, IDC thinks that HP managed to edge out Big Blue in the quarter. IDC figures that HP had $3.86bn in server sales in Q3, down 2 per cent, compared to IBM's $3.81bn, down 3.1 per cent. Dell came in third, with $1.51bn in sales (down 4.3 per cent), Sun Microsystems came in fourth with $1.19bn (down 10.9 per cent), and Fujitsu-Siemens had $647m (down 8.4 per cent). All the other tier-two and whitebox vendors added together pushed $1.56bn in servers, a decline of 12.2 per cent. ®

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