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Gartner Says Worldwide Server Shipments Grew 8.7 Percent While Revenue Grew 2.6 Percent in Third Quarter of 2007

(PresseBox) (STAMFORD, Conn., ) Worldwide server shipments for the third quarter of 2007 increased 8.7 percent over the same quarter last year, while worldwide server revenue for the same period climbed 2.6 percent according to Gartner, Inc. Worldwide server revenue totaled $13.4 billion for the quarter, as worldwide servers shipments reached just over 2.2 million units.

"This quarter the server market grew both in units and revenue, driven by x86 market volumes in the quarter, while RISC-Itanium UNIX servers revenue grew at 8 percent." said Errol Rasit, senior analyst at Gartner. "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. Any implications from financial market instability were not visible in the server market in the third quarter."

IBM continued to lead the worldwide server market based on revenue (see Table 1). It had increases for the quarter in System p and System x, while it experienced declines in System z and System i, which combined to produce an overall revenue decline of 8 percent for the quarter. IBM’s shipments fell just under 4 percent for the quarter, and it lost just under 2 percent of shipment share on a worldwide basis.

In server shipments, Hewlett-Packard grew 20.2 percent compared to the third quarter of 2006, and retained its worldwide server shipment lead (see Table 2). HP finished the quarter with 26.5 percent shipment share for the period. ISS continued to execute strongly and gained share in the x86 segment. The BCS division benefited from a comparison with a weak third quarter last year, although the performance this year was still good. Investments that HP has made in its account coverage and go to market activities now seem to be paying off across the server business.

Dell enjoyed its second quarter running of shipment growth and grew by 5.4, and gained 0.7 percent in share which is a reflection of Dell’s steadily improving results each quarter. Sun’s SPARC Enterprise servers boosted revenue results in the quarter which resulted in an 11.4 percent growth in revenue but Sun experienced a 4.5 percent decline in server shipments. Sun’s focus on product margins over volumes contributed to this volume decline. Fujitsu/FSC grew 17.4 percent in shipments and grew 3.4 percent in server revenue. Shipment growth was driven by FSC’s x86-based Primergy business in Europe Middle East and Africa (EMEA).

The blade server segment continued to drive growth in the third quarter. Worldwide blade server shipments grew 13.8 percent, accounting for 10 percent of server shipment share. HP retained its lead in this segment with the most significant shipment increase at 91 percent compared to the same quarter last year. Sun’s re-entry into the server blade market in 2006 saw it climb from the No. 9 position to the No. 4 largest blade server vendor.

In EMEA, server shipments in the third quarter of 2007 increased 12.8 percent over the same quarter last year, while server revenue for the same period increased 5.9 percent. Server revenue totaled $4.13 billion for the quarter and server shipments reached 645 thousand units.

"The third quarter of 2007 was again a strong quarter for the server market in EMEA, with shipments returning to double digit growth. Overall demand for servers remained healthy with no visible impact from financial market instability during the quarter," said Samina Malik, principal analyst at Gartner. x86-based servers continued to perform strongly but RISC/Itanium UNIX servers also saw robust revenue growth year-on-year, driven by strong performances from Sun Microsystems and HP.

HP retained the No.1 vendor position based on revenue (see Table 3) and exhibited a similar performance to its results worldwide.

IBM’s revenue declined across most of its server lines and was impacted by transitions to new products, except for its x86-based System x line which grew revenue year-on-year. Sun, in third position, posted strong revenue growth mostly driven by its RISC-based products. Dell, in fourth position continued to see its server revenue increase, driven by strong revenue growth in 1 and 2-socket servers.

Based on server shipments, HP maintained its No.1 position with shipments growing 20.7 percent compared to the same period last year (see Table 4). Both HP and Fujitsu/FSC grew server shipments faster than that of the total market. Dell and IBM held the No. 2 and No. 3 positions respectively, with just over 13,000 units separating the two vendors. IBM was the only vendor of the top five to record a shipment decline year-on-year, caused by a slight decrease in its System x server shipments and product transitions in its System p and System i lines.

Additional information is available to subscribers of Gartner Dataquest’s Servers Quarterly Statistics Worldwide program. This program provides worldwide market size and share data by vendor revenue and unit shipments. Segments include: region, vendor, vendor brand, sub brand, CPU type, CPU group, Max CPU, platform, price band, operating systems and distribution channels.