IBM leads in worldwide server sales
Published: 26 Feb 2001 10:06 GMT
Sun Microsystems may have won round one in the fight for server market share in the US, but IBM has come back with a swift uppercut to take the lead in the worldwide server market.
Recent numbers from market researcher Dataquest show IBM is still the top dog with regard to server sales worldwide, pocketing $13.74bn (£9.44bn) in revenue for 2000.
Dataquest's report on the status of the server market in the US shows that Sun managed to nudge past IBM with $4.8bn (£3.3bn) in sales last year. The Internet boom has benefited Sun in the domestic market, as startups and traditional companies alike have raced to embrace e-commerce and build up their technology infrastructure.
The worldwide statistics put IBM back in the lead -- but with a catch. The company's server revenue for all of 2000 increased only a smidgen from the $13.73bn (£9.43bn) of 1999, leading overall but trailing Sun in growth. Sun shipped $9.7bn (£6.7bn) worth of servers in 2000 -- up 28 percent from the $7bn (£4.8bn) worth shipped in 1999, according to Dataquest figures.
IBM closed the year on a positive note. Revenue for the fourth quarter grew a whopping 84 percent, from $2.16bn (£1.48bn) in 1999 to $3.99bn (£2.74bn) in 2000.
Sun meanwhile grew a comparatively modest 35 percent for the fourth quarter, from $2.05bn (£1.41bn) to $2.76bn (£1.89bn), Dataquest said.
Servers have become a hardware must-have as companies seek to incorporate the Internet as well as private computer networks into their operations. Because servers are powerful and complex machines, they command higher profit margins for those companies that sell them.
Sun Microsystems took the server world by storm in the second half of the 1990s, selling servers that used the Unix operating system while IBM, Hewlett-Packard and Compaq were grappling with more complicated product lines that employed a multitude of chips and operating systems. The dot-com boom late in the decade only helped to grow Sun's position in the industry.
Amid a weaker market, however, Sun is having a harder time. Last Thursday it warned of diminishing revenue, words that stand in stark contrast to Sun's boasts just a month ago that it met expectations, a statement issued while rival HP was delivering more dire news.
IBM, meanwhile, has learned some lessons from Sun. It has taken steps to simplify its product offerings, unifying its four server lines under the "eServer" brand name and moving aggressively to recapture the Unix server market.
IBM said that from the fourth quarter of 1999 to the fourth quarter of 2000 its Unix server revenue grew 49 percent -- a figure that caught some analysts' attention.
"Clearly, IBM is gaining share in Unix," said UBS Warburg analyst Don Young in a research note Friday. "The robust Unix trend is continuing for [IBM], the first time in years that any vendor has matched or outgrown Sun in the Unix space."
In the race for third place for 2000, Compaq passed HP with 27 percent revenue growth, from $6.77bn (£4.65bn) to $8.6bn (£5.9bn). HP's server sales grew three percent from $6.97bn (£4.79bn) to $7.16bn (£4.92bn).
In addition, Compaq sold the most servers when measured by unit shipments instead of revenue. The company became the first to sell more than a million servers, according to Dataquest.
HP's server revenue for the fourth quarter actually shrank, according to Dataquest. Sales of $1.82bn (£1.25bn) in the fourth quarter of 1999 dropped five percent to $1.77bn (£1.22bn) in the fourth quarter of 2000.
Dell Computer, in fifth place, saw revenue growth of 72 percent from $1.99bn (£1.37bn) to $3.44bn (£2.36bn), Dataquest said. Dell sells servers are based only on Intel chips, whereas the other four have higher-end designs with more expensive chips.
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