IDC and Gartner are reporting similar server shipment and revenue increases for the second quarter of 2010. According to IDC, overall worldwide server shipments are up nearly 24 percent with revenue rising 11 percent. Gartner is reporting slightly higher action: server shipments are up 27 percent with revenue jumping 14 percent.
Volume x86-based servers drove the overall growth. IDC reports 32 percent revenue growth while Gartner pegs it at 37 percent. Both organizations reported approximately a 23 percent drop in high-end, mainframe-class enterprise servers.
“As in the first quarter, the second quarter again demonstrated strong year-on-year growth,” noted Jeffrey Hewitt, research vice president at Gartner. “There remained some regional variations, but all geographies demonstrated improving market conditions.”
"x86-based servers grew 28.9 percent in units in the second quarter and 37.0 percent in revenues. RISC/Itanium Unix servers remained constrained, with declines of 16.5 percent in shipments and decreases of 8.8 percent in vendor revenues, compared to the same quarter last year. The 'other' CPU category, which is primarily mainframes, fell 22.8 percent in revenues for the quarter," he added.
Crossroads?
"The server market is at a crossroads. This is the fourth consecutive quarter of improving server market demand and the fastest quarterly server revenue growth IDC has reported in more than 5 years," reported Matt Eastwood, group vice president of Enterprise Platforms at IDC.
"IDC continues to see widespread infrastructure refresh occurring across all geographies. While much of this refresh is occurring first in x86-based servers, IDC expects the recovery to extend to Unix and mainframe platforms in the second half of 2010. That said, it is clear that a wave of migration is also occurring as customers broaden their deployment of x86-based servers to a wider range of workloads."
IDC has seen a 7.2 percent revenue decline in UNIX server revenue in the second quarter compared to the year-ago quarter, but attributes a good portion of the slide to vendor product refresh cycles.
"The uptick in the midrange server market shows there was pent-up demand for more scalable servers, through replacement for aging servers and workload consolidation," noted Jean S. Bozman, research vice president of Enterprise Servers at IDC.
"This segment was hard-hit in 2009, during the deepest part of the economic downturn to date, but IDC expects this decline to moderate in the second half of 2010, with shipments of new midrange enterprise server products in the Unix server market, and continued demand for more scalable x86 servers in the midrange segment -- servers priced from $25,000 to $250,000," she adds.
Of course, IBM has just now delivered a full range of IBM Power Systems, which should spark more than a few customer upgrades.
Blades on the Rise
According to IDC, the blade market accelerated in the second quarter with factory revenue increasing 30.9 percent year over year and shipment growth increasing by 13.6 percent compared to 2Q09. Overall, bladed servers, including x86, EPIC (Itanium-based), and RISC blades, accounted for $1.5 billion in revenues, representing 14 percent of quarterly server market revenue. More than 80 percent of all blade revenue is driven by x86 systems, a segment in which blades now represent 18.9 percent of all x86 server revenue.
"Blade adoption continued to gain momentum in the second quarter of 2010, as blades accounted for its largest portion of total server revenue since the form-factor came to market," reported Jed Scaramella, research manager of Enterprise Servers at IDC. "Vendors continue to build out their blade offerings through enhanced virtualization, management, and I/O capabilities; customers are leveraging these technologies as part of converged systems that are a building block to future internal cloud infrastructures," he said.
Bigger Volume vs. Bigger Money
According to Gartner, HP led the pack in volume by shipping 644,172 units, followed by Dell with 542,799, and IBM with 267,614 trailing both HP and Dell with less than half of the two leaders' volume. And yet, when the price tags at tallied at the register, HP brought in $3.5 billion followed IBM's impressive $3 billion and Dell's $1.8 billion. Obviously IBM makes its living selling significantly larger servers in bigger deals.
Oh, and then there's this, in case you were wondering: Oracle (now selling Sun servers after the acquisition) shipped 47,968 units, trailing Fujitsu's 60,974. Interestingly, Oracle's 47,000 units brought in $928 million in revenue. Doing the basic math, Oracle must have the highest average selling price for its systems over the top five server vendors in the world.