IBM stands tall in server market

IBM surged in server market share in 2001, gaining at the expense of Sun Microsystems, Hewlett-Packard and Compaq Computer as the overall market shrank, new figures show.

IBM's server revenue decreased from $13.9 billion in 2000 to $13.6 billion in 2001, according to figures from market researcher Gartner released Friday. But because the overall market shrank faster--down 15 percent, from $55.6 billion to $47 billion--IBM actually gained share.

Big Blue cemented its first-place spot in the worldwide market, increasing its share from 25 percent to 29 percent. The increase mirrors similar changes in the North American server market.

IBM has benefited from resurgent sales of its old-guard mainframe line, spurred in part by the new ability to run the Linux operating system. But demand for servers in general dried up, with companies worried about the recession and overcapacity left over from the Internet spending spree.

Worldwide, second-place Sun dropped 2 percent, to 15.4 percent, while third-place Compaq dropped 0.9 percent, to 13.9 percent, and fourth-place HP dropped 0.1 percent, to 12.8 percent. Fifth-place Dell Computer eked out a 0.1 percent gain to 6.4 percent.

In the key Unix server market--a sweet spot with a good balance of server power and price--IBM also gained, increasing share 2.3 percent, to 20.3 percent, with sales of $4.2 billion.

The Unix server market dropped 18.7 percent, from $25.3 billion in 2001 to $20.6 billion in 2000, Gartner said. The Unix server market is the biggest single segment of the server market, accounting for 44 percent of total sales.

But IBM's gain wasn't enough to topple No. 1 Sun, whose share shrank 3.1 percent, to 35.2 percent, with sales of $7.3 billion. And No. 2 HP, after a concerted effort to stanch losses, rose 1 percent, to 20.5 percent, with sales of $4.6 billion.

Dell gained the most in the Intel server market, increasing 0.5 percent, to 17.6 percent, with $3.1 billion in sales. No. 1 Intel server seller Compaq lost 1.6 percent share, dropping to 26.3 percent with $4.5 billion in sales.

The overall Intel server market dropped 16.2 percent, from $20.5 billion to $17.2 billion, Gartner said.