IBM Grabs Q3 Server Sales Lead As HP, Oracle Stumble

Analyst firm Gartner, which on Monday released its quarterly server sales report, wrote that worldwide total server revenue rose 5.2 percent in the third quarter compared to the same period as last year to reach $13 billion.

Worldwide server shipments during the quarter rose 7.2 percent over last year to reach 2.4 million units, Gartner reported.

The fact that third quarter server shipments rose at a rate faster than that of the sales revenue indicates that the average selling price for servers slipped compared to last year. That breaks a recent string of several quarters in which the average selling price actually rose.

IBM was the big winner for the quarter by taking over the number one spot in terms of server revenue from HP thanks to HP's dispute with arch-rival Oracle over software support for its Itanium-based servers.

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HP retained its title as the world's largest server manufacturer in terms of units shipped. Nearly one-third of the world's servers were manufactured by HP, which had total sales of over 693,000 units, giving it a 32.3 percent market share. However, the number of servers shipped by HP during the quarter was actually down 3.1 percent compared to last year, Gartner said.

Dell came in at number two, with a 3.2-percent rise in shipments to reach nearly 518,000 units. That gave the vendor a 21.8-percent market share.

They were followed by IBM, whose sales were flat over last year at 287,500 units, and Fujitsu, which saw sales rise 4.8 percent to 79,000 units. The big winner here was Lenovo, which saw a 77.0-percent rise in shipments to well over 46,000 units, albeit from a small base last year.

In terms of server sales, IBM took over the number one spot from HP during the third quarter with a 3.5-percent increase sales over last year to reach $3.85 billion thanks to a huge 27.0-percent growth in its Unix servers as well as a smaller 1.1-percent growth in x86-based servers, Gartner said.

HP fell to number two in server revenue thanks to a 3.6-percent drop over last year to $3.80 billion. The drop was led by an 18.5-percent fall in revenue from HP's Unix server line, combined with flat sales of its x86-based servers.

Dell took advantage of a 6.3-percent increase in sales of its x86-based servers to solidify its number three position in overall server sales at $1.9 billion.

Oracle saw flat overall server sales at $764 million, caused mainly by an 11.6-percent drop in its Unix server sales.

IBM's rise in server sales at the expense of HP and Oracle stems from the ongoing dispute between HP and Oracle over Oracle's decision to stop supporting HP's Itanium-based servers with future versions of its software.

IBM in October said that it recorded over 250 competitive displacements worth a total of over $240 million in the Unix server market during its fiscal third quarter, with the displacements split evenly between HP and Oracle.

Shipments of blade servers rose 3.3 percent over last year while revenue for blade servers rose 7.6 percent, Gartner reported.

That trend not only helped HP, the world's largest blade server vendor, but also Cisco, which appeared in the top five x86-based server vendors in terms of revenue with a 192.8-percent rise to $268.3 million thanks to its growing UCS server line, Gartner wrote.