Blades Buck the Trend

by Andy Patrizio

Server sales continue inching upward, with blades proving the market's lone hot area, according to the latest stats from market research firm IDC.

Server sales continue inching upward, with blades proving the market's lone hot area, according to new stats from market research firm IDC.

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The company's fourth-quarter 2007 sales figures show that worldwide revenue growth totaled 2.4 percent compared to Q4 2006, with sales of $15.7 billion. For the entire year, the market saw 3.6 percent growth, reaching $54.4 billion.

Worldwide server unit shipments grew 9 percent compared to fourth-quarter 2006, and 6.7 percent for the year, IDC said.

Revenue for volume systems, defined as systems under $250,000, grew 8.2 percent year over year in the fourth quarter. Midrange systems, priced from $250,000 to $500,000, slipped 0.5 percent, while high-end servers — costing more than $500,000 — dropped 5.7 percent.

The blade server segment continued to buck those modest growth trends, with fourth-quarter factory revenue up 54.2 percent over the year before.

"Server demand remained strong across most major market segments in the fourth quarter driven by a continued shift toward modularization as customers expand and refresh their IT infrastructures while embracing blade computing as well as scale-out and scale-up server technologies," said Matthew Eastwood, group vice president of IDC's Enterprise Platforms Group, in a statement.

For the year, worldwide blade server revenue grew 40.9 percent to $3.9 billion. IBM and HP dominate the space, with 80 percent of the market between the two of them.

Blades still represent a small market segment, however, accounting for only 7.8 percent of quarterly server market revenue.

IBM remained in the No. 1 spot, with 37.5 percent of revenues in Q4 and 32.7 percent for the year.

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However, those numbers typify the anemic growth rate facing the industry: Big Blue's Q4 2007 revenue rose only 0.5 percent from a year earlier, and just 1.1 percent for the year.

Like its competitor Gartner has found, IDC said IBM experienced brisk sales in System p and System x (POWER and x86 servers, respectively) with weakness in System i and System z (former AS/400 and mainframes, respectively).

HP again finished in second place, claiming 27.7 percent of quarterly revenue, up 6.3 percent over the same quarter in 2006.

The company took in 28.3 percent of total revenue for the year, a 8.1 percent rise. IDC attributed the growth to strong demand for HP's ProLiant and Integrity servers.

Dell and Sun ended the quarterly in a tightly contested race. No. 3 Dell claimed 10.1 percent of total revenue, while Sun took home 9.3 percent of the market -- a statistical tie, IDC said.

Despite the two companies' photo finish, Dell's third-place ranking comes as a result of robust growth: The company's sales rose 12.4 percent for the year while Sun was up only 1.9.

The dead heat — along with Dell's far stronger momentum — come as both companies are seeking to regain ground with new leadership at each.

Finally, Fujitsu/Siemens, which sells high-end RISC servers using Sun's UltraSPARC processor, saw a slight decrease in sales for the year, dropping 0.5 percent to $2.67 billion. On the other hand, the company's fourth quarter revenue rose 7.1 percent from the previous year.

On the software side, Microsoft Windows servers grew 6.9 percent in revenue, leading the market with 36.6 percent of total quarterly revenue. The company's servers — the latest edition of which, Windows Server 2008, debuted today — also saw 9.8 percent growth in unit sales for the year.

Unix server sales bumped up 1.5 percent during the fourth quarter to $5.2 billion, and represented 33.3 percent of quarterly server spending.

Linux server revenue reached $2.0 billion for the first time in any single quarter, thanks to 11.6 percent growth over Q4 2006. Linux-based servers now represent 12.7 percent of all server revenue, according to IDC.

This article was originally published on InternetNews.com.

This article was originally published on Friday Feb 29th 2008
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