IBM tops 2003 server market

IBM tops 2003 server market

IBM extended its lead over Hewlett-Packard as the top server vendor in 2003, with Big Blue's revenue share of the worldwide market for Unix and Intel Corp.-based servers growing to 32 percent in revenue terms, according to industry research firm Gartner Inc.

IBM's revenue climbed 10 percent to reach US$14.8 billion for the year, which was twice the growth rate for the overall market, but still not as fast as the industry's fastest growing vendor, Dell Inc. Dell's 2003 server revenue jumped 22 percent, from 3.3 billion in 2002 to $4 billion last year, Gartner said.

"Dell is continuing to show very strong performance," said Joseph Gonzalez, an industry analyst with Gartner. "By selling strictly through the direct channel, they've got a very close look at what their customers are requesting. When there's a shift in demand out there, they are one of the first to know it."

IBM's growth was helped by its strong showing in the last three months of the year. In that period, its Intel server business grew 15 percent to $1 billion, and in its Unix business increased 21 percent to $1.2 billion. IBM was the only major vendor to show year-over-year growth in its Unix business, which grew by 13 percent in 2003, to $4.1 billion.

Sun Microsystems Inc. and Dell were ranked, respectively, the third- and fourth-largest server vendors by revenue, according to Gartner.

The year was a particularly tough one for beleaguered Sun, which saw its revenue drop by 15 percent for the year, to $5.5 billion, and its share of the shrinking Unix market drop by over 4 percentage points, to 32.6 percent. Though Sun remained the leader in Unix shipments for the year, its lead over second-place Unix vendor HP was cut significantly to less than 1 percent, and HP actually out-sold Sun during the third and fourth quarters of 2003, Gartner said.

"A year ago Sun was a big leader. HP has done a tremendous job in closing the gap," Gonzalez said of the Unix market. HP will probably displace Sun as the top Unix vendor over the next few quarters, Gonzalez predicted. "I don't expect to see what I would call a clear leader in that market for another year," he said.

HP, which remained the leader in Intel server sales with 33.8 percent of the market, saw its revenue grow at 5 percent, or the same pace as the server market overall. HP's total server sales went from $11.9 billion in 2002 to $12.5 billion in 2003, according to Gartner.

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