In Server Growth IBM beats HP & Oracle

IBM's server revenues grew 22.1% in the first quarter, outpacing rivals as demand for the types of high-end systems in which Big Blue specializes picked up. Total industry revenue from non-x86 servers, including Unix and mainframe systems, jumped 12.3%, compared to a 10.1% increase in revenue from sales of servers that run Windows or Linux on industry-standard chips, according to numbers released Wednesday by market watcher IDC. IBM's quarterly server revenues came in at $3.5 billion, making it the number two player in sales behind Hewlett-Packard. But IBM's server business is growing faster than that of its Palo Alto-based rival, which saw 10.8% growth. IBM officials said the company's rich portfolio of Unix and mainframe technologies is allowing it to cash in on customers' moves to higher-end systems. Rod Adkins, senior VP for Systems and Technology, said businesses' need to deal with ever larger amounts of data, structured and unstructured, is driving them toward tightly integrated systems like IBM's Power7 line. Servers like the Power7-based Power 780 are designed so that the processors, middleware, and hardware work in concert to deal with applications feeding huge amounts of so-called big data from sources as diverse as call centers, smartphones, and tablet computers. "We'll continue to have a unique advantage," said Adkins, in an interview. "When you start to think about the nature of these applications and workloads, and the types of integration that you need to do going forward, the investments that you make at each layer of the system stack will make a difference." IDC officials said growth in enterprise-class systems is also being driven by companies' need to refresh older systems—something they put off during the recession. "The Unix server marketplace is seeing new market dynamics centered on technology refresh for mission-critical workloads," said IDC research vice president Jean Bozman, in a statement. "This segment was hard-hit in 2009 and 2010 during the economic downturn as customers deferred or delayed acquisition of midrange and high-end Unix servers," said Bozman. "Customers' servers are being refreshed to carry forward Unix-specific, mission-critical workloads." Growth wasn't limited to the high-end of the server market. Total industry revenue from systems that run on x86 chips from Intel or AMD grew 12%, to $7.9 billion, while unit shipments increased 2.6%. Overall, HP led the market with Q1 sales of $3.8 billion, up 10.8% from the previous year. Its market share fell slightly, from 31.8% to 31.5%. IBM's market share grew from 26.9% to 29.2%. Dell, the number three player, saw sales increase 9.7%, to $1.9 billion, but its share fell to 15.6%, from 16% the previous year. Oracle, which entered the server business last year when it completed its $7.4 billion buyout of Sun Microsystems, saw system revenues increase to $773 million in the quarter, up 13.6% from the previous year. Its market share was 6.5%.


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