World server shipments increase by 4.4 percent

WORLDWIDE server shipments for the third quarter of 2008 increased 4,4 percent over the same period last year, while revenue declined 5,4 percent.

According to Gartner, an international technology research and advisory firm, worldwide server revenues totalled US$12,7 billion for the quarter from 2,3 million units.

“Server shipments grew in the third quarter, but the spectre of constrained economies and tightened credit was felt in the revenue area,” said Jeffrey Hewitt, research vice-president at Gartner.

“What we’ve seen is larger system purchases in the Unix area put in check. At the same time x86 servers were able to maintain some shipment momentum, but lower overall average x86 server selling prices resulted in a drop in revenue in the quarter for this server type as well.

“Evidence of a challenged RISC-Itanium Unix server area appeared in a fall of 16,1 percent in shipments and 10,8 percent in revenue,” Hewitt added.

The top five vendors all experienced a decline in revenue in the third quarter of 2008. IBM held the revenue lead in the worldwide server market for the quarter. This was driven by sales of both the System p and System z brands.

IBM’s overall revenue share lead over second-placed Hewlett-Packard was 0,5 percent for the quarter.

In server shipments, HP grew 11,4 percent compared to the third quarter of 2007, and retained its worldwide server shipment lead. The share gap between it and second-placed Dell increased 2,1 percentage points for the quarter.

HP finished the quarter with its shipment market share reaching 31,2 percent for the period. HP’s growth came from its ProLiant brands. HP pushed its blade server shipment share upward 3,9 percent to reach a total of 46,4 percent for the quarter.

Dell and Sun both posted shipment growth for the quarter at 3,3 percent and 2,9 percent, respectively. IBM’s server shipments fell 3,5 percent and Fujitsu/Fujitsu Siemens’ server shipments dropped 3,8 percent for the quarter.

In Europe, the Middle East and Africa (EMEA), server shipments totalled more than 68 000 units in the third quarter of 2008, a 5,8 percent growth from the same period last year. Server revenue totalled US$3,9-billion in the third quarter of 2008, a 5,4 percent decrease over the same quarter last year.

“Effects of a weaker economy bit the server market in the third quarter of 2008, which marked the first year-on-year decline in server revenues since the second quarter of 2006,” said Errol Rasit, senior research analyst at Gartner.

“However, server shipments continued to grow at 5,8 percent, demonstrating healthy performance in the x86 market.”

Except for HP, all the other leading vendors experienced a decline in revenue in the third quarter of 2008. HP held the revenue lead in the EMEA server market for the quarter, with 0,9 percent year-on-year growth.

In server shipments, HP retained its market share which helped it maintain its number one position, with shipments increasing 14 percent year-on-year.

Rasit added: “HP was the only vendor to exhibit a double-digit year-on-year growth demonstrating its dominance in the server market. Of the top five vendors, Dell was the only vendor to show growth but could not repeat its strong performance seen in the first half of 2008.”

In the third quarter of 2008, RISC and Itanium Unix revenues declined 11,3 percent while units declined 20,1 percent year-on-year. Of the top five vendors in this segment, only Groupe Bull exhibited revenue growth. Sun saw the biggest revenue decline in this segment with -20,1 percent growth.

In the x86 market, total volumes in EMEA grew 7 percent from the third quarter of 2007. HP bolstered the growth and accounted for 14,9 percent market share, far outpacing any of its nearest rivals. In server shipments, Dell grew 4,3 percent year-on-year while IBM and FSC declined. The battle for fifth place continued in the third quarter of 2008 with Acer taking Sun’s position.