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IDC: Q4 Server Revenue Declines Again, But Shows Improvement

By Joseph F. Kovar
February 25, 2010    6:58 PM ET

Worldwide server revenue in the fourth quarter of 2009 dropped nearly 4 percent compared to the same period last year, but that was a much better showing than for the rest of 2009, according to analyst firm IDC.

IDC this week said worldwide server revenue for the fourth quarter of 2009 reached $13.0 billion, down 3.9 percent compared to the fourth quarter of 2008.

However, IDC said, worldwide server shipments in the fourth quarter increased 1.9 percent over last year to reach 1.9 million units.

IDC's server sales report closely matches that of rival analyst firm Gartner, which this week estimated that 2.3 million servers were shipped in the fourth quarter of 2009, up 4.5 percent over last year, with revenue from the sale of those servers reaching $12.6 billion in the fourth quarter of 2009, down 3.2 percent over last year.

For all of 2009, IDC estimated that revenue from server sales dropped by 18.9 percent to $43.2 billion compared to 2008, with total server shipments falling 18.6 percent to 6.6 million units.

Fourth quarter 2009 had some bright spots for the server market, IDC said. Worldwide revenue in the volume server market, which IDC defined as servers priced under $25,000, rose 9.9 percent compared to the fourth quarter of 2008, compared to a 5.3 percent drop in midrange server revenue and a 23.6 percent drop in sales of servers valued over $250,000.

Sales of servers with Microsoft Windows operating systems rose 13.7 percent in terms of revenue and 5.5 percent in terms of units shipped in the fourth quarter of 2009 compared to 2008, and accounted for nearly 42 percent of total server revenue in the fourth quarter of 2009.

Total Linux server in the quarter rose 6.1 percent compared to last year, which means that Linux servers now account for 14.7 percent of all server revenue, up 1.4 points from the fourth quarter of 2009, IDC said.

Blade server revenue rose a sharp 30.9 percent and shipments rose 8.3 percent between the fourth quarters of 2008 and 2009, IDC said. Hewlett-Packard remains the blade server market leader with a 52.4 percent revenue share, while IBM kept its number two spot with a 28.4 percent revenue share in the fourth quarter of 2009.

For the quarter, IBM was the overall server market leader with a 35.4 percent share, compared to HP with a 30.5 percent share and Dell with an 11.5-percent share. Sun and Fujitsu rounded out the top five vendors.

For all of 2009, IDC said IBM was the top server vendor with a 32.9 percent market share in revenue terms. It was followed by HP with a 29.9 percent market share, Dell at 12.1 percent, Sun at 8.9 percent, and Fujitsu at 5.1 percent.

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