Server Sales Up 4.5% In 4Q - InformationWeek

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Server Sales Up 4.5% In 4Q

The good news was tempered by plummeting sales of high-end systems, resulting in an overall 3.2% drop in global revenue, said Gartner.

The worldwide server market recovered in the second half of 2009 from the economic downturn, but plummeting sales in high-end systems resulted in a decline in overall revenue in the fourth quarter, market data released Wednesday showed.

Sales of low-end servers in the quarter pushed overall shipments up 4.5% year over year to 2.24 million units, Gartner reported. However, global revenue for the quarter fell 3.2% to $1.49 billion.

While good news, the rise in shipments did not represent a strong comeback for the market.

"The recovery that began in the third quarter of 2009 based on x86 servers extended into the fourth quarter," Gartner researcher Jeffrey Hewitt said in a statement. "However, it is important to put this into context. The fourth quarter of 2008 was quite weak, so the fourth quarter of 2009 did not have to produce huge x86 server numbers to result in an increase."

While relatively inexpensive blade servers grew by 11.1% in shipments and 22.1% in revenue for the quarter, shipments and revenue of more expensive RISC/Itanium servers plummeted 30.5% and 20%, respectively.

IBM remained the market leader in terms of revenue in the quarter, but saw a 5.9% decline that pushed its market share down a percentage point to 32.7%. With the exception of Sun Microsystems, the remaining top five vendors -- Hewlett-Packard, Dell, and Fujitsu -- posted increases in revenue. Sun has recently been acquired by Oracle.

In server shipments, HP continued to lead, as a 3.8% year over year increase in sales pushed its share up two-tenths of a percent. The company's ProLiant brand showed growth in the quarter, while all of its other brands saw a decrease in revenue, Gartner said. Of the top five vendors, all but Sun posted increases in shipments.

For the full year, worldwide server shipments fell 16.6% from 2008, while revenue declined 18.3%. Gartner predicts a return to shipment growth this year in the middle or high single digits and revenue growth at a slightly lower level. The increases are being buffered by the use of x86 server virtualization, which consolidates physical machines as they are replaced, Gartner said.

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