That giant sucking sound: Sun's server share continues to deteriorate

That giant sucking sound: Sun's server share continues to deteriorate

Summary: Global server revenue fell 17.3 percent in the third quarter, but sales were up sequentially for the first time since the fourth quarter of 2008, according to IDC data. However, Sun Microsystems' sales continued to fall 35 percent as the company lies in limbo as regulators ponder a deal with Oracle.

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Global server revenue fell 17.3 percent in the third quarter, but sales were up sequentially for the first time since the fourth quarter of 2008, according to IDC data. However, Sun Microsystems' sales continued to fall 35 percent as the company lies in limbo as regulators ponder a deal with Oracle.

Let's roll the stats (IDC statement):

All of the vendors are down, but there are signs of relative strength. Dell is doing well with the smallest sales decline and anecdotal reports indicate that IBM and HP are ripping out a bunch of Sun boxes in server installations.

Meanwhile, Sun sits with market share of 7.5 percent, down 2 points from a year ago. The third quarter picture was even uglier than the second quarter in terms of raw factory revenue. It's clear that the Oracle purchase of Sun revolves a good bit around software, but the price tag should justifiably be lowered. Sun just isn't the same company it was when Oracle initially offered to buy it. Blame the EU for the delay, but Sun is cratering fast.

There is a glimmer of hope. Sun is at least holding fourth place in the server race. IDC says:

Sun maintained its fourth place position by posting a 35.0% year-over-year revenue decline and holding 7.5% market share for the quarter as many customers wait for additional product roadmap detail following Oracle's pending acquisition of Sun.

Among other data points:

  • Microsoft Windows server revenue was $4.5 billion in the third quarter, down 12.8 percent from a year ago, but good for 43 percent of the sales pie.
  • Linux server revenue fell 12.6 percent to $1.5 billion in the third quarter, good for 14.8 percent of server sales.
  • Unix server revenue fell 23.8 percent to $2.8 billion in the third quarter. That's good for 26.9 percent of quarterly server revenue. IBM gained 5.1 points of market share in the third quarter.

Topics: Enterprise Software, Banking, Hardware, Oracle, Servers

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11 comments
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  • Can someone remind me of why Oracle bought Sun?

    Server sales across the board have dropped, but Sun servers are tanking. Windows and Linux OS's, while dropped, aren't very bad and look like they'll both grow. Not so much for Solaris.

    Sun also has the Java portfolio, but there are lots of other platforms Oracle could use. And, from what I remember, Java doesn't give anything extremely special to Oracle.

    Can anyone help me out, here?

    FearTheDonut
    • Personally and i could be wrong

      Oracle wanna have Sun for hardware and
      portfolio .
      By buying Sun Oracle become completely autonomous and self reliant ...

      I can control everything from A to Z
      Hardware /OS/database/office suite/.
      In one complete package . oracle can sell you
      all the known support ask it you have it.

      And all Its port folio ....


      That why oracle bought Sun ....I could be wrong
      Quebec-french
      • I remember some of that....

        Now that you mentioned that, I seem to remember some people commenting exactly what you've talked about..

        I wonder, though, whether that is panning out. Oracle had the database already. The Office Suite (Open Office?) was free already.... They gain nothing unless they start charging for it. And, if you're going to spend money on an office suite, most companies will either buy Microsoft Office or subscribe to Google Docs. They're not going to use Open Office en masse, not anytime soon.

        Solaris and Sun hardware was declining before Oracle's acquisition. Now, it's dropping faster.

        To me, control over Java seems to be the only thing which has a future in Sun's portfolio.

        Now, what will Oracle do with it?

        FearTheDonut
    • to save Sun from the claws of the M$ beast

      unfortunately Oracle underestimated the M$ moles inside the EC that are now spreading FUD and causing monetary damage.
      Linux Geek
  • What I don't understand

    is that everytime I read a Linux vs MS vs Sun vs IBM it's that Linux has the lion share of the server market in terms of sales. The article says otherwise

    Unfortuneatelly, it looks like server sales are down across the board, though IBM must be doing something right; they're up.
    John Zern
    • you just mix the comment

      the question seem ( i could be wrong) about
      hardware company and not OS linux dont built
      server its only a OS .....

      When you look at what will come with a IBM
      blade or server ...

      AIX,IBM I,Redhat,MS .... and yes IBM is doing
      something right they offer alternative .....

      When Sun and oracle will have a few years maybe
      the game will be different way different.
      Quebec-french
  • govt interference destroys another company

    Oracle wants (wanted?) Sun and is (was) willing to pay for it. The company has (had) some value. But the EC decides an Oracle takeover gives them an unfair competitive advantage. Better to let Sun die off completely apparently. Thank goodness we have these guys to protect us.
    frylock
    • there also a other solution

      Ellison give what EC want a assurance that MYsql
      will not be trash ( foundation and the like )


      After that willl see ...
      Quebec-french
  • RE: That giant sucking sound: Sun's server share continues to deteriorate

    It isn't just the uncertainty about the merger, Sun is refusing to support features built in to their own OS. After a very unsatisfactory support experience with Sun lately, we will not be buying any more any time soon. We are seeing similar issues with IBM. Ironically, Fujitsu seems to be the only server vendor out there actually interested in getting/keeping our business. Everyone else seems to think they are doing us a favor by selling us their products.
    ncted
  • RE: That giant sucking sound: Sun's server share continues to deteriorate

    SUN's decline isn't only due to Oracle and the EU issue, but it's refusal to understand its customers - SUN has done everything possible to alienate their customers from making it almost impossible to get service, refusing service because SUN's records are inaccurate, RIF most if not all internals sales, etc. It?s a shame to see a company that had so much potential, to decline to a point of almost being worthless - Oracle has a huge task ahead, to turn SUN into a viable product line once again.
    rueterd
  • RE: That giant sucking sound: Sun's server share continues to deteriorate

    ciiuvh,good post!
    makrekdw52-24353617803762337820509209691466