Mainframe sales push IBM past HP as top server vendor

In an age of seemingly disposable servers, there are still organizations out ready and willing to plunk down hundreds of thousands of dollars for good ol’ big iron — enough so over the past year to make IBM the leader of the server market based on revenue, according to IDC. HP still rules the x86 market, however, and maintains it’s still the leader of the server world.

Whichever way you want to pick your winner, there’s no escaping the fact that 2010 was a big year for server vendors. Overall revenue from worldwide sales increased by 11.4 percent to $48.1 billion, further demonstrating that companies are loosening their purse strings as the economy recovers. Worldwide unit shipments increased 15.3 percent to 7.6 million units.

Big iron means big revenue Worldwide server revenue for Q4 was $15 billion, up 15.3 percent year over year; server shipments for the quarter were up just 6.1 percent. Interestingly, a healthy chunk of that revenue trickled into IBM coffers through sales of its high-end System z mainframe systems, according to IDC.

Jean Bozman, research vice president of IDC’s Enterprise Platforms Group, attributed the increase demand for System z to IBM’s strategy of “closely linking [the platform] to a distributed-system blade chassis running POWER and x86 systems for workloads with mainframe affinity.”

That hybrid-system combo sated customer demand for increased capacity — a necessity as the data explosion continues and computer clouds gather, according to Bozman.

Overall, IBM reaped $5.59 billion in revenue in Q4, a 21.9 percent increase year over year. That’s about $1.1 billion more than HP, the second-place earner for the quarter, raked in for the quarter.

Thanks to that strong fourth quarter, IBM was also able to take the lead over HP as the top vendor in terms of worldwide revenue: Big Blue finished the year with revenue of $15.36 billion, while HP ended the year with $15.32 in revenue, by IDC’s account. In terms of market share, IDC puts IBM’s portion at 32.7 percent and HP’s at 29.8 percent.

IBM and HP are far ahead of the remaining top five server vendors: Dell finished 2010 with 12.1 percent of the market with overall revenue of $7.01 billion, up an impressive 34.2 percent year over year. Sun, despite being consumed by Oracle, finished the year with a share of 8.8 percent and overall revenue of $3.28 billion, a 14.4 percent drop year over year. At year’s end, Fujitsu finished with 5.1 percent of the market and total revenue of $2.19 billion, representing zero change year over year.

HP still rules the x86 market Were it not for those mainframe sales, the picture would be different as x86 server sales soared in Q4. The market swelled by 21.4 percent to $9 billion worldwide, and unit shipments increased by 6.7 percent to 2 million servers. According to IDC, this is the highest quarterly revenue ever reported for x86 servers as the architecture accounted for 59.7 percent of all server spending.

Here, HP was the clear winner, holding 38.5 percent of the x86 server market share. Dell retained the second spot with a 21.1 share. IBM held third place with a 19 percent share, Fujitsu grabbed 3.5 percent, and Sun snagged 2.8 percent.

All told, according to IDC, x86 server revenue for 2010 increased by 28.7 percent to $30.6 billion; worldwide shipment grew to 7.4 million units, a 16.6 percent increase.

High-end x86 servers saw bigger growth in demand than their low-end counterparts, according to Reuben Miller, senior analyst of IDC’s Worldwide Enterprise Server group. He said that organizations are embracing multiprocessor boxes over single-CPU systems to get more performance within the limited confines of their server rooms and data centers.

Companies keep wielding blades Despite competition from higher-end servers, blades have enjoyed increased demand of late, according to IDC. Q4 generated the highest quarterly revenue for the blade segment since they were introduced in 2003, according to Jed Scaramella, research manager of IDC’s Enterprise Platforms and Datacenter Trends groups.

He attributed the ongoing investment in blades to their capability of running at higher levels of virtualization and automation, which brings higher flexibility to IT. “As a basis for converged systems, blades are increasing the responsiveness of the IT organization,” he said,

Overall, blades — including x86, EPIC, and RISC units — accounted for $2 billion in the Q4, marking a 13.4 percent revenue boost for the quarter. For the year, blade revenue grew 24.7 percent to $6.6 billion, according to IDC, and the form factor now represents 19.2 percent of all x86 server revenue.

HP rules the blade server market still, claiming a 53.4 revenue share in 4Q10; IBM wrapped up the year with a 28.1 percent share.

Linux and Windows feel the love — but not Unix Microsoft benefitted from the x86 server market refresh, according to IDC, as 1.5 million Windows servers shipped in Q4, the highest total ever reported for the platform. Those shipments represented quarterly revenue of $6.3 billion, and Windows servers represented 42.1 percent of the overall quarterly factory revenue. Year over year, Windows hardware revenue swelled by 16.8 percent.

Whereas Windows retained its position as the reigning serving platform, Linux saw the most growth in Q4. Revenue from Linux-loaded servers grew by 29.3 percent over Q409, up to $2.5 billion. Linux servers now represent 17 percent of all server revenue, IDC reported; shipments of servers running Linux increased 9.8 percent year over year, totaling more than 450,000 units.

Unix server revenue, meanwhile, saw a 0.4 percent dip in revenue in Q4, compared to Q409. Worldwide Unix revenues hit $3.8 billion for the quarter, representing 25.6 percent of quarterly server spending.

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