IBM loses server market share to rivals HP, Dell, Sun

HP,  Dell, and Sun made significant gains in the worldwide server market at IBM’s expense in the third quarter, Gartner said in a report issued Monday.

Despite losing market share due to an 8.1 percent drop in revenue and 3.9 percent drop in shipments, IBM issued a press release claiming success, noting that it still holds a slim lead in market share revenue.

The popularity of server virtualization hasn’t significantly affected overall server sales. Worldwide, shipments grew 8.7 percent over the previous year’s third quarter, with 2.2 million units delivered, for revenue growth of 2.6 percent. The server market started growing in the second quarter this year after three years of stagnant sales, a previous report by IDC said.

“Underlying market dynamics such as growth from emerging markets, coupled with an ongoing demand for increased capacity, are stronger than any inhibitors such as server virtualization,” Gartner analyst Errol Rasit said in a press release.

HP made the biggest gains, delivering 649,958 server shipments, 20 percent more than the previous year’s third quarter. HP was already making the most shipments but solidified its lead over second-place Dell and third-place IBM.

IBM earned more server revenue than any of its rivals, despite making 319,674 third-quarter shipments, fewer than half the number delivered by HP.

HP did narrow IBM’s lead in revenue market share, growing revenue 13.9 percent to $3.7 million. IBM revenue dropped 8.1 percent to $4 million, for a slim lead over HP — 30.1 percent to 28.1 percent – in revenue market share.

Dell and Sun posted double-digit revenue increases but are still a distant third and fourth place in market share, according to Gartner’s statistics.

The 8.7 percent increase in worldwide server shipments was driven partly by growth in the x86 and blade server markets, both led by HP, which shipped 91 percent more blade servers than the previous year’s third quarter.

IBM was able to increase revenue for System p and System x, but lost revenue for its System z mainframes  and System i midrange servers.The company nonetheless touted the popularity of its System z mainframe, saying it led the market in revenue for servers priced at $250,000 or more.

“We believe IBM’s eight consecutive years of leadership in the worldwide server market is a testament to our commitment to technology innovation for our clients,” Bill Zeitler, senior vice president and group executive for IBM Systems & Technology Group, said in a statement.

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