Gartner: North America Propels Server Growth, With HP Leaving Dell Behind

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Third-quarter North American server sales and shipments grew over last year thanks in large part to a strong growth in Hewlett-Packard and Cisco sales, which more than made up for major weaknesses in Dell and IBM's server sales, Gartner reported on Wednesday.

Growth in sales to North America, along with those to Africa and the Middle East, led the world's third-quarter 2013 server business, which overall saw a weak 1.9 percent growth in shipments and a 2.1 percent drop in revenue over last year, Gartner reported.

While North America, particularly Canada, kept the worldwide server market in positive growth in the third quarter, it was the Middle East and Africa region where growth was strongest, albeit from a smaller base, said Jeffrey Hewitt, research vice president at Stamford, Conn.-based Gartner.

[Related: Behind The Numbers: Analyzing Gartner's Q2 Server Estimates]

"Some local growth came there thanks to a build-out of Web infrastructures," Hewitt said. "In many parts of the world, smartphones are the main device people use for banking, trade and commerce. Not PCs. I suspect that's where some of that growth came from."

In North America, HP in the third quarter continued its server market dominance with sales of over 256,000 servers, up 22.5 percent over last year. That led to revenue of about $1.4 billion, up 8 percent over last year, Hewitt said.

"HP came back," he said. "But the company needs to fix some sales execution issues. They know that. Also a concern going forward is what impact HP might feel from increasing ODM sales to Web-scale companies."

Dell kept its No. 2 position with shipments of just over 209,000 units, down 22.3 percent over last year. Dell revenue did better, falling only 6 percent to $1.0 billion, Hewitt said.

The rise in HP sales and the drop in Dell sales were also seen worldwide, Gartner reported. This is despite Dell's strong growth in first- and second-quarter 2013 sales together with weak HP sales, which had raised the possibility that Dell might be in line to grab the No. 1 spot from HP.

That did not happen, Hewitt said.

Part of the reason is that, with Dell moving to become a private company, customers may have slowed down orders with the company to wait to see how the shift would play out, Hewitt said.

"Also, how much of the drop can we attribute to a Microsoft buying cycle?" Hewitt said. "We know Microsoft has been buying Dell for its data centers."


NEXT: Understanding HP's Strength Vs. Dell And Cisco

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