Between the Lines

Larry Dignan, Andrew Nusca and Rachel King

IBM, HP still server top-dogs, amid sales dip on last year

By | November 29, 2011, 3:58am PST

Summary: IBM and HP remain all-but joint partners on Gartner’s third-quarter estimates for 2011, after the two giants took a collective 60 percent of the market.

IBM and HP remain the market leaders in the server business sector, according to latest quarterly figures by analyst Gartner.

The market grew by a touch more than 5 percent to $12.3 billion in revenues, with 2.2 million servers sold.

While worldwide shipments in the third-quarter grew by 7 percent year-on-year, revenue only increased by just over 5 percent year-on-year.

But while Dell grew 6.3 percent from 2010’s third-quarter, Oracle did not grow at all, remaining with a 4.7 percent marketshare, losing an estimated $25 million in revenue.

That said, the third-quarter was strong and the markets can enjoy profits back to nearly how they were before the global financial crisis hit in 2008.

While the markets appear healthy in the U.S. and Canada, predictions about Europe’s markets seemed hedgy at best; a wise decision considering the current turmoil in the European markets, where even the financiers do not know whether the single-market currency, the Euro, will be around this time next year.

IBM attained just shy of 30 percent worldwide server marketshare in the third-quarter, who marginally took the crown from HP with 29.3 percent of the marketshare. But IBM and HP were side-by-side in revenues collected, both accounting for $3.8 billion.

Looking at the figures by-unit, HP sold 694,000 servers, averaging out at a price of $5,500 each, with IBM selling nearly a third of that at 288,000, with an average market price of $13,000.

HP said its sales of industry standard servers — those running regular Intel chips — were down by around 4 percent, while its business critical servers — running Intel’s Itanium chips — were down by nearly a quarter. A significant drop, not helped by the ongoing ding with Oracle, where Oracle had said it would cease support of the Itanium chip because Intel did not plan to keep the platform alive ‘over the long run’.

European antitrust regulators are yet to respond to HP’s calls to investigate Oracle, as the spat reaches the next level.

Dell and Oracle grabbed a 15 percent and 6 percent marketshare respectively in the last quarter.

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Zack Whittaker, a criminologist who studied at the University of Kent, Canterbury, is a journalist, writer and broadcaster.

Disclosure

Zack Whittaker

I worked briefly with Microsoft UK in 2006 but no longer have any connection with the company. Regardless, I remain impartial and unbiased in my views.

I don't hold any stock or shares, investments or industrial secrets in any company, but have signed confidentiality agreements with a number of UK and U.S. organisations, whose names I am not at liberty to disclose.

I was involved with Kent Union, the University of Kent's student union, undertaking voluntary, non-salaried, elected positions between early 2009 and mid-2010.

No other company, body, government department, non-governmental organisation or third sector organisation employs me or pays me a salary in any capacity whatsoever.

As a freelance journalist, whenever expenses are given and taken by a company that is not CBS Interactive, these will be disclosed in each relevant post to ensure transparency.

I currently work with a UK law enforcement unit, but this is an entirely separate position which bears no connection to other work.

(Updated: 23rd October 2011)

Biography

Zack Whittaker

Zack Whittaker, criminologist who studied at the University of Kent, UK, is a journalist, writer and broadcaster.

After studying criminology at university, though still in his early-20's, he has already had a series unconventional work and voluntary positions. He has worked with researchers studying neurological illnesses like Tourette's syndrome (which he suffers from), has given lectures on the nature of disabilities in the public community, and occasionally ends up speaking on television and radio discussing the events of the day.

He first had academic work published at the age of 22, then still an undergraduate, and has been cited by a wide range of publications: from CNN, the Huffington Post, AllThingsDigital, The Atlantic Wire and CBS News.

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