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Virtualization drives APAC server growth

Driven by server consolidation, Asia-Pacific server revenues jumped 29 percent year-on-year in the first quarter of 2011, with the market's growth second only to Eastern Europe, says Gartner.

The Asia-Pacific server market recorded its sixth consecutive quarter of double digit growth in shipments and revenues during the first quarter of 2011, said Gartner.

In a Monday statement, the research firm noted that server shipments in the Asia-Pacific region between January and March 2011 grew 21 percent year-on-year to reach 461,502 units. Revenue in the first quarter also hit US$2.31 billion, an increase of 29 percent over Q1, 2010.

The region was the second-fastest growing geographical market after Eastern Europe, which, according to a statement last week from Gartner, saw a 36 percent year-on-year jump in revenues and 21.1 percent rise in shipment.

Erica Gadjuli, principal research analyst at Gartner, attributed the region's server market growth in Q1 to server consolidation using virtualization technology.

x86-based server sales, she noted, showed "excellent growth" with shipments up 21 percent and revenue growing 31 percent compared to the same period in 2010.

On the other hand, mainframe and RISC/Itanium Unix server demand was driven by IT investments from verticals such as financial services and the public sector, leading to a 137 percent growth in shipments and 15.3 percent growth in revenue during the same period.

Gartner added that continued investment during the first quarter of 2011by mainframe customers in Singapore, China, Taiwan and Korea, coupled with demand for higher-end servers in the RISC (reduced instruction set computer) and x86 segments, contributed significantly to the overall market in the respective countries.

The research firm reported that overall server revenue in Singapore during the first three months of the year grew 63 percent over the same period in 2010, while China saw a 31 percent year-on-year increase. In Taiwan and Korea, server revenues grew by 31 percent and 21 percent respectively, it said.

Over in Hong Kong, total server shipments in Q1 rose 15 percent while revenue grew 21 percent. Gartner noted that spending on RISC and x86 servers boosted the market.

Australia saw a "modest" growth of 10 percent in revenue while shipments fell 5 percent, added Gartner.

Compared with other server form factors--such as rack mountable, rack optimized and tower/standalone--blade servers, which include both x86 and non-x86 systems, grew the fastest in the Asia-Pacific region, said Gadjuli. Blade shipments in Q1 increased by 38 percent over the same period in 2010, while revenues climbed 68 percent.

Vendor-wise, Hewlett-Packard led the Asia-Pacific server market with 30 percent share of first-quarter shipments, or 138,417 units. Dell accounted for 21.8 percent of the market, while IBM had a share of 20.1 percent. The rest of the top 5 players--by shipments--were Chinese players Lenovo and Huawei Technologies, which took 5.1 percent and 3.7 percent, respectively.

In terms of revenue, however, Big Blue took the lead with US$951.4 million, or a market share of 41 percent. HP, at US$671.5 million, was No. 2 with 29 percent of the market while Dell clocked US$287.6 million for a 12.4 percent. Oracle took fourth spot with 6.3 percent, recording US$146.3 million in revenues. The only Chinese player in the top 5 ranks by revenue was Dawning, which accounted for 1.5 percent of the market at US$35.3 million.