Dataquest: U.S. Server Shipments Rising, Linux Coming On Strong

In terms of IA-32-based server revenue, including servers with the Linux operating system, the new HP, including Compaq, beat Dell in a close race for No. 1, said Jeffrey J. Hewitt, principal analyst for Dataquest's servers worldwide program.

HP had revenue for the quarter of $455 million, compared to $439 million for Dell. IBM was a distant third at $233 million, followed by Data General at $58 million and NCR at $20 million. Total U.S. server revenue amounted to about $1.7 billion for the quarter, Hewitt said.

In terms of volume, HP beat Dell, shipping 125,000 units compared to Dell's 116,000 units, Hewitt said. IBM came in with 46,000 units, followed by Gateway with 5,500 units and Data General with 3,300 units. Total shipments in the U.S. were 433,000 units for the quarter.

Of those servers, the Linux-based market segment grew the fastest, Hewitt said. Total Linux-based IA-32 server revenue for the quarter was $220 million, up from $170 million in the same quarter of 2001. Dell was barely the leader, with $59.2 million, followed closely by HP at $58.6 million and IBM at $42 million.

Linux-based IA-32 shipments in the U.S. grew more than 50 percent from last year, reaching 60,453 units during the second quarter of 2002, compared to 40,600 units in 2001. HP led with 16,303 units, followed by Dell with 15,636 units and IBM with 8,315 units.

The race for No. 1 was not so pronounced in the RISC-based Unix market, Hewitt said.

In terms of revenue in the U.S., Sun led by $945 million, followed by HP at $334 million, IBM at $269 million, SGI at $51 million, and Fujitsu at $11 million. Total revenue for the year was $1.6 billion.

Sun shipped 42,000 units in the U.S. in the last quarter, compared to IBM's 7,000 units, HP's 4,000 units, SGI's 469 units, and Fujitsu's 220 units. Shipments totaled about 54,000 units.

In all these categories, Hewitt said it is interesting that the number of vendors with significant market share is dropping. "We used to talk about the top five or the top ten," he said. "Now we talk about the top three."

While server revenue growth in the U.S. is flat compared to last year, shipments are definitely up, said Hewitt.

However, he said, server sales do suffer a lag compared to the economy. The typical sales cycle for low-end servers is about three months, compared to one to two years for servers valued at more than $100,000. "The economy started falling at the end of 2000, when the dot-coms started failing," he said. "But we didn't see the impact until two quarters later. This year, a couple of quarters ago, economists started talking about the recovery. So now we are seeing Q2 numbers that are up sequentially and year-over-year."

Worldwide, the situation is different. While the U.S. server market is recovering, and much of Asia is still barely holding on, the Western Europe and Japan markets are suffering badly, Hewitt said. "If you look at server revenues there, it's really ugly," he said.