IBM Grabs No. 1 Position As Worldwide Server Market Grows 17.5 Percent

According to research group IDC, manufacturers such as IBM, Hewlett Packard, Dell Computer Corp. and Sun Microsystems Inc. shipped 1.2 million servers worldwide during the second quarter, up 17.5 percent from the same period last year.

But the category's revenue of $10.6 billion worldwide in the second quarter was only a 0.2 percent increase, according to the closely watched quarterly report from Framingham, Mass.-based IDC. That made it difficult for researchers to declare the beginning of a server market rebound or even increased optimism among technology-purchasing executives.

Armonk, N.Y.-based IBM sold 30.4 percent of all servers in the quarter -- the No. 1 position, followed by former top seller HP, which slid to second with 27.7 percent, according to IDC. Sun and Dell remained third and fourth in worldwide sales, followed by the Fujitsu-Siemens partnership.

William Zeitler, senior vice president for IBM's server group, predicted more market share losses for HP.

"Over the last three years now, what's been going on is a squeeze in the market, with Dell at the bottom with superior logistics and execution, and IBM at the top with superior technology and execution," Zeitler said.

HP retained its lead in revenue in servers based on the Linux and Windows operating systems, leading the Palo Alto-based company to declare it still leads in "the hottest server markets."

"This continues to be a two-horse race and no doubt the battle with IBM will continue to be intense," said Mark Hudson, vice president of marketing for HP. "The difference is HP's commanding lead in the fast-growing, industry standard-based markets."

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