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November 30, 2009

Global server market stabilises in third quarter, says IDC

IBM holds top spot with 31.8% market share in factory revenue

By CBR Staff Writer

Factory revenue in the worldwide server market declined 17.3% to $10.4 billion in the third quarter of 2009, compared to $12.6 billion in the same period last year, according to research firm IDC.

However, the market grew sequentially for the first time since fourth quarter of 2008. Server unit shipments declined 17.9% year over year in the third quarter of 2009, but grew a 12.4% sequentially, IDC said.

Revenue for all classes of servers declined in the third quarter, with volume systems declining 14.7%, midrange enterprise revenue down 23.4% and high-end enterprise segment revenue declining 19.3%, compared to the same period a year ago.

Matt Eastwood, group vice president of enterprise platforms at IDC, said: The worldwide server market exceeded expectations in the third quarter with improving x86 server demand leading the way, which was driven in part by the infrastructure refresh momentum that is building in many geographies. In fact, x86 server revenues experienced their largest sequential quarterly revenue increase in nearly five years.

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IDC believes that platform migration is once again gaining steam in the market and the post-recession server deployment patterns will establish the technology agenda in the datacentre for the next business cycle. For server vendors, after five quarters of market contraction, the next few quarters will be critical to determining the technology platform winners and losers in the years ahead.

According to IDC, IBM held the top spot in the worldwide server market with 31.8% market share in the factory revenue in the third quarter of 2009. Its revenue declined by 12.9% during the quarter.

Hewlett-Packard was in the second spot with 30.9% share, although revenue declined by 16.8% year-over-year. Dell and Sun held third and fourth market positions with 13.5% and 7.5% factory revenue share, respectively. Dell’s factory revenue declined by 6.8%, while Sun’s factory revenue declined 35% year over year. Fujitsu maintained its fifth-place in terms of factory revenue, with 5.7% market share in the quarter.

Microsoft Windows server revenue declined 12.8% to $4.5 billion, Linux server revenue declined 12.6% year-over-year to $1.5 billion in the quarter and Unix servers experienced a 23.4% revenue decline, compared to the third quarter of 2008.

The x86 server factory revenue declined 12.3% year over year in the third quarter of 2009 to $6.1 billion. However, x86 factory revenues increased a 18.7% sequentially. The blade server market segment returned to quarterly revenue growth with factory revenue increasing 1.2% year over year on a 14% year-over-year shipment decline.

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