IBM reclaims server market share revenue crown in Q4, says Gartner

IBM reclaims server market share revenue crown in Q4, says Gartner

Summary: IBM handily claimed the server market share lead in the fourth quarter as the company rode its new mainframe and Power7 systems, according to Gartner. Overall, fourth quarter server revenue was up 16.4 percent from a year ago.

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IBM handily claimed the server market share lead in the fourth quarter as the company rode its new mainframe and Power7 systems, according to Gartner. Overall, fourth quarter server revenue was up 16.4 percent from a year ago.

In the fourth quarter a year ago, IBM and HP were in a virtual tie in terms of server market share based on revenue. HP lost market share in the fourth quarter as IBM and Dell gained. Oracle took the largest market share hit in the fourth quarter as the company focuses on higher end systems.

Gartner said pent-up server demand fueled results. Overall, server sales delivered solid growth in the fourth quarter as the data center upgrade cycle continued.

Add it up and IBM grabbed 35.5 percent of server market share courtesy of a 2.8 point share gain. IBM has claimed that it is poaching share from both Hewlett-Packard and Oracle. The company moved 650 Oracle and HP customers over to IBM servers in the fourth quarter and 1,200 migrations for 2010.

The majority of those migrations were from legacy Sun Unix gear.

Here's a look at the standings based on revenue:

In terms of units, HP is in the lead.

For 2010, HP and IBM remained in a virtual tie.

Here's what Gartner said about 2011. In a nutshell, IBM and HP will continue to duke it out.

The outlook for 2011 suggests that growth will continue, but at lower levels, because the highest level of the replacement cycle for x86 servers was probably reached in 2010. These increases continue to be buffered by the use of x86 server virtualization to consolidate physical machines as they are replaced.

HP and IBM are tussling for outright market leadership as both vendors achieved revenues of over $15 billion for 2010, both with a market share of 31 percent. HP achieved a stronger year on year growth rate of 18.9 percent to IBM’s 9.2 percent. HP has demonstrated strength with the results of its x86 ProLiant line all year, although IBM’s System Z line was key in its improved results in the fourth quarter. 2011 will be a critical year in determining which of the relative strengths of these two leading vendors are best aligned to the market direction.

Topics: CXO, Banking, Enterprise Software, Hardware, Hewlett-Packard, IBM, IT Priorities, Servers

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7 comments
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  • "says Gartner"?

    You must be joking!!!!! By gawd man Gartner is a TOOL for any industry that makes a 'donation'. Those doctored spreadsheets mean nothing, not to mention they looked like they were typed on some 1980's manual typewriter, what's up with that horrible document?
    james347
    • So, what was wrong with the report and the graphs/figures?

      How do you see it?

      Who's ahead; who's behind?
      adornoe
      • RE: IBM reclaims server market share revenue crown in Q4, says Gartner

        @adornoe@... What's wrong! They are from Gartner! That says it all.
        james347
      • You still didn't answer the question.

        And, yeah, I too don't trust Gartner, but, specifically where was the report wrong?<br><br>If they're wrong, we need to point to the exact reasons why they're wrong. I'm very suspicious myself about how IBM is in the lead, and in the next chart, HP is in the lead. So, where is it most important to be "in the lead"?<br><br>It's the same kind of reporting that states that Apple is the largest tech company, but, some of those reports don't mention that market-cap is not what makes a company the "largest". Microsoft, as an example, is bigger than Apple as far as the number of products and services, and in the number of sectors where they have penetration and the number of people affected by their products and services. . <br><br>That's why I'm asking for clarifications from you about how you see the report as being biased.
        adornoe
      • RE: IBM reclaims server market share revenue crown in Q4, says Gartner

        @adornoe@... I read this as "not a lot has changed", except that Oracle is concentrating on high end systems, meaning the other vendors are picking up those old Sun customers. Also, IBM released some new kit, and their customers decided to buy it. Apart from those two anomalies, it's business as usual.

        The interesting stat there is that Fujitsu shipped 12.4% more units for a 0.5% reduction in revenue. Keep in mind Fujitsu are the other SPARC vendor; I'm thinking that Suns low end SPARC customers are looking at Fujitsu for their low end gear now.
        nathanr.au
      • RE: IBM reclaims server market share revenue crown in Q4, says Gartner

        @adornoe@...

        It's actually very simple. One set of numbers refers to revenue, the other set of numbers to units. HP sold over twice as many servers in Q4 as IBM, but the servers IBM sold cost well over twice as much, on average, as the servers HP sold, so IBM had higher revenue.

        Which is more important? It depends on what you're interested in, which is why Gartner report both. From a business perspective, and assuming similar profit margins, revenue is more important. In terms of building an installed base, however, which may create network effects in the medium- to long-run, units are more important.
        WilErz
      • WilErz: That's what I was trying to get at...

        The problem with the blog is that, the blogger chose to state that "IBM reclaimed" the lead in server share revenue, but at the same time, the blogger didn't state that, the number of servers sold went to HP; sure the charts reflected that, but that's not the impression that was left by the report from the blogger or by the study creator.
        adornoe