Virtualization takes toll on physical server sales

Virtualization takes toll on physical server sales

Gartner says virtualization cut into server sales growth in the third quarter

New numbers from Gartner show that computer server sales slowed in the third quarter, a trend the research company attributes to virtualisation.

Gartner's latest report on servers shows that worldwide sales grew by 4.4 per cent, based on revenue, to just over $US13 billion, and 9.1 per cent by unit volume, to 2 billion servers. In the second quarter, sales rose 2.5 per cent by revenue and 12.8 per cent by unit volume.

"We have seen double-digit growth in the past," research director for Gartner, Jeff Hewitt, said. "Server sales are still growing, but because of virtualisation, customers don't have to buy as many servers."

Virtualisation makes it possible to run more programs on one physical server, using more of its capacity and making it possible for a data centre to handle more work with fewer servers.

Among the server vendors, market share rankings remained the same in Gartner's numbers, which cover the three-month period ended September 30, compared with previous quarters.

IBM retained the market share lead, with 33.7 per cent, based on a 7.4 per cent revenue gain to $US4.38 billion, from the third quarter of 2005. HP followed with 25.3 per cent market share on a 6 per cent decline in revenue to $3.29 billion. Dell ranked third with a 10.8 per cent share on a 10.2 per cent revenue gain to $US1.41 billion. Sun Microsystems came fourth with a 10.1 per cent share based on a 24.7 per cent revenue gain to $US1.31 billion.

Fujitsu Computer Systems rounded out the top five, with a 4.9 per cent share on a 5.6 per cent revenue gain to $US634 million. Other vendors combined for a 15.3 per cent share based on 6.5 per cent revenue growth to $US1.99 billion.

Hewitt attributed Sun's resurgence to the introduction of new servers running the Opteron microprocessor from Advanced Micro Devices, which has emerged as a strong competitor to the processors from Intel.

In sales based on unit volume, HP led the way with a 26.5 per cent share based on 7.2 per cent growth to 540,609 units; Dell ranked second with a 22.5 per cent share on 10.5 per cent growth to 459,950; IBM third with 16.3 per cent share on 7.7 per cent growth to 332,777; Sun Microsystems fourth with a 4.1 per cent share on a 6.4 per cent growth to 83,018 units; and Fujitsu fifth with a 3.2 per cent, based on a decline of 5.9 per cent to 65,171. Other server brands collectively reported 27.5 per cent share on growth of 13.4 per cent to 560,913 units.

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