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Worldwide server sales head south as shipments put on ice

Unix, mainframe transitions stall Q2

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The server market took a bit of a breather again in the second quarter ended in June, say the box counters at IDC. It's not a surprise, with a number of Unix vendors getting ready to launch new boxes, IBM not yet shipping its new System zEC12 mainframes announced this week, and Hewlett-Packard's Integrity Itanium servers still chilled by Oracle's threat to not support its software on the boxes. The x86 server racket can't compensate for all that negativity. And it didn't.

IDC reckons that vendors shipped 2 million servers out of their factories in the second quarter, a 3.6 per cent decrease in unit shipments year-on-year and marking the first shipment decline in nearly three years. Whoops. And without all those thousands of big, expensive Unix and mainframe boxes going out the factory doors, revenues took a 4.8 per cent dip, to $12.6bn. This is the third consecutive quarter of revenue declines for the server biz, but with new RISC, Itanium, and mainframe engines in the works, perhaps it will perk up a bit as the year comes to an end.

The bad news is that the volume server segment - machines that cost under $25,000 and that are dominated by x86-based iron - had a shipment stall in the quarter. The good news for Intel and Advanced Micro Devices is that the decline in shipments was lot worse for for high-end boxes costing more than $250,000 (down 7.6 per cent) and even worse for those midrange boxes in the middle of these brackets (off 11.2 per cent).

Across all system sizes and prices, there were 1.9 million x86 boxes shipped in Q2, down six-tenths of a point, but thanks to the beefier boxes customers are buying to support server virtualization, revenues nonetheless rose by 3.5 per cent to $8.7bn. Non-x86 boxes brought in $3.9bn, down 19.4 per cent.

Blades were an even brighter spot in the quarter, thanks in great part to the uptake of Cisco Systems' UCS blade servers, with revenues across all blade types (including RISC, Itanium, and x86 machines) rising 6.3 per cent to $2.1bn; blade shipments rose by 4.1 per cent. HP had a very commanding 51.5 per cent share of the blade server pie in the second quarter, but IBM had only 15.9 per cent and Cisco, with 13.8 per cent, has bypassed Dell and is nearly caught up to Big Blue in the blade racket. Dell drove 8.1 per cent of blade sales in Q2.

IDC declared a statistical tie for first place in terms of server revenues in the second quarter, with HP selling $3.73bn in boxes and declining 5 per cent to IBM's $3.68bn, falling 8.2 per cent. HP and IBM were in the same tie in the second quarter of 2011, with IBM slightly ahead.

Dell came in number three as it always does, this time around with just over $2bn in sales and rising 5.9 per cent year-on-year. Oracle continues to bleed market share as server revenues drop as it backs away from unprofitable parts of the former Sun Microsystems biz. The company is gearing up for its own Sparc T5 server push later this year. Oracle's server sales fell 20.1 per cent to $752m. Fujitsu, which is also getting set to launch its Sparc64 X processors, had a staggering 42.1 per cent decline to $489m as it had a very tough compare because it was building the 10.5 petaflops K supercomputer for the Japanese government a year ago. Other vendors, bolstered substantially by Cisco's nearly doubling server business, had a 20.2 per cent bump to $1.93bn.

Every quarter, IDC takes a stab at estimating what the primary operating system will be on each system, something of a relic of the old physical server system, but an interesting exercise all the same. IDC estimates that Linux servers accounted for $2.8bn in revenues in Q2, up 1.7 per cent. Unix systems stomached a 20.3 per cent decline to $2.3bn, and even though market leader Big Blue's AIX systems sales dropped 10 per cent, it still managed to gain 6.1 points of market share – because HP and Oracle are declining even faster. Windows-based machines drove $6bn in sales, rising three-tenths of a point. ®

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