IBM takes lion's share of server market

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IBM leads the way when it comes to making money out of servers, according to analysts.

Both Gartner and IDC research groups place IBM at the top of the revenue pile for the third quarter of 2006.

Both use slightly different metrics for measuring performance. Gartner showed IBM as having pulled in $4.81bn for the quarter, compared with $4.28bn from IDC.

The company accounts for roughly a third of the market in terms of revenues and grown that share year on year.

'High-end enterprise revenue grew over 9 per cent on the strength of IBM's System z product family. The introduction of the z9 BC (business class) machines coupled with the previously announced z9 EC (enterprise class) systems, invigorated the mainframe market during the quarter,' said Steve Josselyn, research director Enterprise Platforms at IDC. 'IBM's System z revenue growth of 25 per cent contributed a significant amount to overall market performance, and further highlights the continued customer demand for mainframe-class systems.'

'The System z business has surprised some with its strength and resilience in the face of an extremely competitive server technology market,' said Bob Hoey, VP of worldwide sales for IBM System z. 'The positive revenue share numbers demonstrate that the mainframe is well positioned to take advantage of current trends. Some of the key values of the mainframe platform - such as unparalleled security, stability and scalability - have been part of the system from inception and are now more important to clients than ever before. The continued momentum of System z certainly comes as no surprise to IBM.'

The market showed a familiar pattern, with declines in the high-end RISC Unix market continuing, while blades and x86 systems continued to grow. The server blade market showed factory revenue gaining 29.9 per cent and shipments increasing by 24.5 per cent year on year, said IDC.

'Blade servers and x86 servers in total continue to produce the highest growth levels within the overall market,' agreed Jeffrey Hewitt, research director at Gartner. 'Both of these server types show ongoing installation growth at the front and middle of the Web server tiers.'

IBM accounts for a massive 42.3 per cent of the blade market, according to IDC, and HP second with 35 per cent.

Overall the server market was up 3.5 per cent year on year with nearly $13bn in revenues. Behind IBM, according to IDC, HP came second with $3.4bn in factory revenues - a near 3 per cent year on year decline. Vying for third are Dell, with $1.35bn and Sun, with $1.3bn. However, Sun showed a 15.8 per cent year on year growth compared with Dell's 3.8 per cent. Down 9 per cent and in fifth position is Fujitsu Siemens with $690m in factory revenues.

A more granular viewpoint shows some key success stories. EPIC/Itanium-based servers grew 23.8 per cent to take the market share past 10 per cent for non-x86 revenues. In the x86 segment, AMD continued to dominate the volume area, with revenues up nearly 80 per cent year on year and accounting for nearly a fifth of all x86 revenues.

By platform, Windows took the lion's share for the first time, according to IDC, with revenues up 4.6 per cent to $4.8bn. Linux continued in a positive direction, pulling in $1.5bn in revenues and accounting for 11.8 per cent of all server revenues, although the growth rate for the platform is moderating.

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