Obviously choosing IBM's AIX for UNIX workloads usually takes a lot of people in an organization, plus a bit of bean-counting wheeling and dealing. Still, the big three UNIX server solutions providers -- HP, IBM, and Sun -- have been duking it out for your business for the last decade. Or rather, HP and Sun were fighting while IBM circled the fray looking for an opening -- and IBM found it in 2005 when IBM overtook both HP and Sun in UNIX marketshare due to the strength of POWER5. IBM has been kicking butt and taking names ever since. 

 

These days, IBM is fond of showing off a line-graph chart that shows just how far IBM has come over the years. Back in 1999, IBM had barely 18 percent of the revenue share for UNIX servers, while Sun and HP held about 28 percent. Sun peaked with about 36 percent share in early 2001, while HP peaked with 34 percent or so in 2002. Both HP and Sun have since lost ground, falling back to around 26-27 percent . . . while IBM has jumped to more than 40 percent revenue share. Pretty freakin' impressive, really.

 

In fact, IBM reports that it has seen eight consecutive quarters of market share growth. These numbers just show where enterprises are spending their UNIX server dollars, but from a technology perspective, how would you like to be sitting on a Sun system right now, looking at Oracle and Sun's roadmap?

IBM bases its numbers for the graph on various IDC and Gartner reports over the years, and both analyst firms recently reported on the latest state of worldwide server sales for the first quarter of 2010. Here's the key news: 

 

According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market increased 4.7 percent year over year to $10.4 billion in the first quarter of 2010 (1Q10). This is the first quarter of year-over-year revenue growth in seven quarters, as server market demand continued to improve around the world. Server unit shipments increased 23.3 percent year over year in 1Q10, but midrange enterprise demand was weak, posting an 18.9 percent year-over-year decline. In the high-end, revenue dipped 28.7 percent. 

 

Most of the action has been in the x86 space as enterprises update older, smaller servers. 

 

"This is the third consecutive quarter that IDC reported improving market conditions for servers worldwide. The market recovery has been led by sharply higher demand for x86 servers around the world as SMB and enterprise customers aggressively refresh their infrastructures," notes Matt Eastwood, group vice president of Enterprise Platforms at IDC. "IDC expects the recovery to extend to Unix and mainframe platforms in the second half of 2010 as the technology refresh extends from volume- to value-oriented systems with somewhat longer planning horizons. It's also important to note that we are in the middle of one of the sharpest periods of market inflection in a decade and we expect significant shifts in technology usage and market shares to occur as the recovery continues."

 

Unix servers experienced 29 percent revenue decline when compared to 1Q09 as customers waited for additional detail on the Sun-Oracle server roadmap, IDC noted. They were also anticipating a ramp of IBM POWER7 servers, which began shipping in Q1, and, separately, HP Integrity servers based on Intel Itanium 9300 processors that were announced in April. Worldwide Unix revenues were $2.3 billion for the quarter, representing 22.2 percent of quarterly server spending (down 10.5 points over 1Q09).

 

"The Unix server marketplace is in transition, with new market dynamics -- and a new provider in Oracle, which just completed its acquisition of Sun Microsystems," explains Jean S. Bozman, research vice president, Enterprise Servers at IDC. "This segment was hard-hit in 2009, and its product mix -- with most of its revenue in the midrange and high-end segments -- has yet to show signs of growth in 2010. IDC expects this decline to moderate in 2H10, as all vendors have refreshed their product set to carry forward Unix-specific, mission-critical workloads."

 

Of course, many customers have been waiting for IBM to deliver POWER7-based systems, both at the high and lower end of the midrange line. IBM announced AIX 7, which will hit later this summer and is expected to help boost IBM Power System upgrade action. 

 

As for Gartner, the research group posted similar results as IDC, overall, with slight variances depending on the exact categories they track (it's not always a 1-to-1 map). In any event, not surprisingly, HP nows sits at the top of the revenue share mountain for overall server sales, based on its x86 sales success, while IBM dropped. 

 

Overall, RISC and Itanium Unix revenues declined 27 percent in the first quarter of 2010, Gartner reports. IBM led the segment in the first quarter of 2010, despite a decline that matched the overall market at 27 percent. Although HP exhibited a revenue decline of 24 percent year over year, the vendor showed the best performance in the segment, and HP subsequently grew its market share by 1.5 percentage points in the first quarter of 2010. Oracle, having closed the acquisition of Sun, moved to the No. 3 position and saw its revenue decline 31 percent. Bull and Fujitsu maintained their fourth and fifth places, respectively.

 

“Challenges remain in this segment as the longer sales cycles that we see for these platforms are currently compounded by significant product refreshes for both IBM and HP,” notes Adrian O’Connell, principal research analyst at Gartner. “The integration of Sun into Oracle is an additional factor that complicates current levels of demand. We expect demand in this segment to improve during 2010, but the vendors in this segment will be facing increasing challenges from Windows and Linux platforms.”