Gartner: Server Growth Up 8.9 Percent in 2006

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The server market continues to grow at a healthy rate, with blade servers and x86 showing the greatest strength while RISC continues its decline, according to the 2006 worldwide server report just released from Gartner.

Worldwide server shipments totaled 8.2 million units in 2006, an 8.9 percent increase from the 7.5 million shipped in 2005. Once again, Hewlett-Packard (Quote) led the pack with 27.5 percent of the market, followed by Dell (Quote) with 21.7 percent and IBM (Quote) with 15.7 percent. Sun Microsystems (Quote) was a distant fourth with 4.5 percent of the market.

In terms of dollars, revenue in 2006 was $52.7 billion, up just two percent from $51.6 billion in 2005. Gartner attributed this to a slowdown in x86 server sales. “Most of that slowdown seems to be attributable to a lengthening of the sales cycle due to the anticipated introduction of quad-core x86 processors with some lesser impact from x86 server virtualization,” said Jeffrey Hewitt, research vice president at Gartner in a statement.

IBM continued to lead in terms of dollars, with $16.9 billion in sales and 32.1 percent of the total revenue pie, thanks to growth across the board but especially in its System Z and zSeries mainframes, which were up 10.3 percent in 2006. Clearly the mainframe is not dead, despite almost yearly attempts to declare it so.

“Mainframes were the fastest growing segment of the server market in 2006, which shows just how relevant these systems are to customers today,” said Bob Hoey, vice president IBM System z, in a statement emailed to internetnews.com. “This growth can be attributed to the launch of the System z Business Class mainframe during the year, as well a $100 million investment to simplify the platform and the uptake of workloads driven by the launch of specialty processors for Linux and Java.”

While its market share was flat, Sun did see a nice bounce in revenue, reversing a yearly decline that had been going on since 2001. Sun’s revenues jumped 15.4 percent, to $5.7 billion. By contrast, IBM was up only 1.7 percent over 2005 sales, Dell revenue was essentially flat at 0.4 percent growth and HP fell by 2.3 percent.

Naturally, Sun is pleased. “We have the best server line-up in our history, an unmatched asset in Solaris 10, and a sales force that is working closely with customers who believe network computing delivers a competitive advantage. We’re happy with the progress we’ve made over the past year, but plan to keep
working hard to build on our success,” said John Fowler, executive vice president of Systems at Sun in comments e-mailed to internetnews.com.

HP was the overall unit leader, with 27.5 percent of the market and the top x86 server vendor, with 28.5 percent of the market, while Sun was the leader in the RISC/Itanium Unix market with 54.1 percent. However, the RISC/Itanium market was down 1.6 percent in unit sales over 2005. HP’s percentage of the RISC market was down 10.1 percent as it transitions off of its PA-RISC.

This article was first published on InternetNews.com. To read the full article, click here.