IDC Q2 Server Data: Dell Gains Share As HP, IBM Lose Ground

Dell's worldwide server unit shipments rose in the second quarter as rivals Hewlett-Packard and IBM lost ground, according to sources who have seen the preliminary data from market researcher IDC.

The IDC data shows Dell's server unit shipments in the second quarter were up 4.8 percent to 552,486 units, just 28,684 units behind No. 1 global shipment winner HP, whose global shipments declined 13.6 percent to 581,170 units during the quarter, sources said. IBM's server global shipments, meanwhile, dropped 8.4 percent to 200,985 units, the sources said.

HP remains the No. 1 server global shipment provider with 30 percent share followed by Dell with 28.6 percent share, IBM with 10.4 percent share, Cisco with 2.9 percent share and Lenovo with 2.7 percent share, according to sources who have seen the preliminary data.

[Related: Gartner: HP Server Shipment Share Slides In Q2 ]

IDC, HP and IBM declined to comment.

The "other" category, which is made up primarily of original design manufacturers and contract manufacturers building hyper-scale systems for service providers and Internet companies, continues to gain share, with its global shipment share up 4.2 percent in the quarter to 288,190 units, sources said.

Cisco's unified compute system server has also continued to gain global unit shipment share, shipping 56,825 units, up 16.5 percent, sources said.

Dell's global unit shipments in the density-optimized server market, favored by large service providers and Internet companies, grew 37.4 percent in the quarter compared to 12.3 percent for HP and a 25.2 percent drop for IBM, according to sources that have seen the data.

Matt Baker, Executive Director of Enterprise Strategy at Dell, attributed the company's server share growth to strong sales of its 12G PowerEdge high-performance and hyper-scale servers. "We are in it for the long haul, focused on price, performance and value," he said.

More telling is the number of channel partners that have signed on with Dell to sell servers. Baker said the number of Dell partners in the company's PartnerDirect program is up 38 percent in the last year to 138,000.

NEXT: Dell Partner: Help Closing Deals Is Key To Dell Success

Dell's aggressive pricing has helped the company win market share, but more importantly Dell has been rolling up its sleeves right alongside partners helping close deals, said Michael Gavaghen, vice president of sales at SLPowers, a West Palm Beach, Fla.-based Dell partner.

"We've got a horse in this race," Gavaghen said. "And that means something when you have [corporate raider] Carl Icahn chipping away everyday at Dell's reputation," referring to Dell founder and CEO Michael Dell's contentious battle with Icahn over control of the Round Rock, Texas, company.

HP and IBM partners, for their part, said they are not concerned by the market share slide by the respective vendors.

"I don't care about [market share] percentage points," said Haggai Davis, director of sales at Gulf South Technologies Solutions, a Baton Rouge, La.-based solution provider that exclusively sells HP hardware. "Most of my customers don't know what brand servers they are using. They buy the Haggai brand. All they care about is, does it work and if it breaks can I fix it?"

Tom Hughes, director of alliances for Technology Solutions Group of Ciber, a Colorado Spring, Colo.-based IBM partner, said he believes Big Blue will win in the long run with a hybrid play helping companies manage their networks with IBM software, services and POWER and x86 System X- servers.

For companies only interested in server share bragging rights, the short game is selling commodity servers with razor-thin margins for pure play cloud-hosting solutions, said Hughes. More sustainable is building on-premise hybrid infrastructure solutions intelligent enough to handle business needs inside and outside the enterprise.

"If all you are doing is selling hardware for the cloud, you are missing a huge part of the market. System builders with cohesive hardware, software and service solutions have survivable business model," Hughes said.

PUBLISHED AUG. 13, 2013