Server Shipments, Revenue Show Strong Growth: Gartner

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The server market is showing strong signs of recovery, with Gartner estimating first quarter 2010 worldwide shipments up 23 percent and revenue up 6 percent compared to the same period as last year.

The growth in server shipments was led by the x86-based models, shipments of which rose 25.3 percent over last year to reach 2.1 million units, Gartner said.

The average selling price of those servers appears to be rising, as Gartner estimated the total revenue of x86-based servers rose year-over-year by 32.1 percent to $7.2 billion.

That rise in price is evidence that customers are using virtualization to consolidate their servers, said Jeffrey Hewitt, research vice president at Gartner.

“I don’t have hard-core data on that,” Hewitt said. “But is it a wild guess? No.”

Larger memory and new quad-core processors contribute to higher average selling prices, and are related to virtualization, Hewitt said. At the same time, however, customers are also adopting such server-intensive storage tasks as data deduplication and SANs.

“We’re in a data center transformation revolution,” he said.

Shipments of RISC-based and Itanium-based servers, on the other hand, fell 28.5 percent to 46,117 units, while revenue from those servers fell 26.9 percent to $2.2 billion, Gartner said.

That drop stems from two main causes, Hewitt said.

First, the recovery in server sales in the first quarter represents short sales cycles, while mainframe and Unix servers require longer sales cycles.

Furthermore, customers are anticipating the release of new high-end servers, particularly mainframes and Power-based systems from IBM. “And you just can’t ignore the fact that Oracle just bought Sun (Microsystems),” he said.

Blade server sales rose the fastest of any type of server, with shipments up 23.7 percent and revenue up 40.7 percent, Gartner said.

Leading the server market recovery was the U.S., where server shipments grew 28.6 percent compared to last year. Gartner said that shipments and revenue grew year-over-year in every geography except Japan, which experienced a 0.7-percent drop in server revenue.


Next: How The Top Vendors Performed

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