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IDC: IBM, HP see server revenue fall in Q2, Dell's revenue grows

IBM and Hewlett-Packard tied for the top position by revenue

IBM and Hewlett-Packard tied for the top position in server factory revenue in the second quarter, with a 29.2 and 29.6 percent share respectively, IDC said on Tuesday.

But Dell was the only vendor among the top five whose server revenue increased. The 5.9 percent growth in the quarter from the same quarter last year took it to the third position, its highest ever server market share. Oracle and Fujitsu got to the fourth and fifth positions.

Overall revenue and shipments fell from a year earlier as the market softened after a strong refresh cycle in the last two years, the research firm said.

Server shipments decreased 3.6 percent year-over-year to 2.0 million units in the quarter, the first annual decline in almost three years, while revenue decreased 4.8 percent year-over-year to US$12.6 billion, the research firm said.

The highest revenue decline was in mid-range systems at 11.2 percent, followed by 7.6 percent decline in larger systems. The decline in volume systems was smaller at 2.5 percent.

IBM had a 8.2 percent year-over-year decline in factory revenue losing 1.1 points of share in the quarter because of soft demand for its servers ahead of a number of major product transitions, while HP's factory revenue declined 5 percent year-over-year in the second quarter, IDC said.

The market for non-x86 servers declined 19.4 percent by revenue from the same quarter last year to $3.9 billion, making it the fourth consecutive quarter of revenue decline for non-x86 based systems, which accounted for 30.6 percent of the server market in the second quarter. Unit shipments of x86 servers were down 0.6 percent to 1.9 million servers, the first decline in about three years, but revenue picked up in the quarter by 3.5 percent to $8.7 billion, as the market is moving towards higher-end configurations with higher average selling prices. HP led the market with a 36.4 percent revenue share, followed by Dell and IBM.

Unix servers had a revenue decline of 20.3 percent year-over-year to $2.3 billion for a 18.4 percent share of server revenue for the quarter. IBM saw Unix server revenue drop by 10 percent, but its share of this market grew. The Unix server is headed towards becoming a smaller, specialized segment of the server market, catering primarily to customers "who are looking for high levels of availability and stability in a scale-up architecture," IDC said.

Linux servers accounted for 22.1 percent of all server revenue in the quarter, up 1.4 points when compared with the second quarter of 2011. Linux server demand was helped by high performance computing and cloud infrastructure deployments, as hardware revenue increased at 1.7 percent year-over-year to $2.8 billion in the second quarter.

Bladed servers accounted for 16.9 percent of all servers by revenue at $2.1 billion, as in the second quarter factory revenue of blades increased 6.3 percent year-over-year and shipment growth increased by 4.1 percent. HP led in the bladed server market with a 51.5 percent revenue share in contrast to IBM at second place with a 15.9 percent revenue share.


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