Server Revenues Fall in Q3

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Both IDC and Gartner are reporting that revenues from server sales declined during the third quarter. IDC reported a 4 percent drop, while Gartner reported a 2.8 percent drop.

According to the IDC press release, “This is the fourth consecutive quarter of year-over-year revenue decline, as server market demand continued to soften following a strong refresh cycle that characterized the market in most of 2010 and 2011. After declining in 2Q12, server unit shipments increased 0.6% year over year in 3Q12 to 2.1 million units. This was the 11th time in the past 12 quarters that server units have grown on a year-over-year basis.”

Gartner’s release noted, “Four of the top five global vendors had revenue decreases for the third quarter of 2012. Dell was the only vendor among the top five to have its revenue increase in the third quarter. IBM had the lead for the quarter in the worldwide server market based on revenue (see Table 1)–the company posted $3.5 billion in server vendor revenue for a total share of 27.6 percent. IBM’s revenue was down 9.5 percent year-on-year.”

Jeffrey Burt from eWeek added, “In numbers released last week, Dell remained in the number-three position in terms of revenue—with growth between 8.2 percent and 10.3 percent compared with the same period last year—but saw its market share grow as leaders IBM and Hewlett-Packard saw sales decline, the analysts firms said. In addition, Dell and Cisco Systems, with its Unified Computing Systems (UCS) converged data center solution, were the only ones in the top five to see server shipments increase, according to Gartner numbers. Cisco—whose UCS includes Cisco-branded servers and networking equipment, as well as storage from the likes of EMC and NetApp and virtualization technology from VMware—saw shipments grow 40.4 percent over the third quarter in 2011, and its market share jump to 2.3 percent, from 1.7 percent a year ago.”

ServerWatch’s Sean Michael Kerner reported, “Not all sectors of the global server market are in decline. In particular, IDC noted that Linux is growing. Linux server hardware revenues for 3Q12 were reported at $2.6 billion for a 6.6 percent year-over-year gain. In contrast, both Windows and Unix server hardware revenues are going the other way. Microsoft Windows server hardware declined by 0.9 percent to $6.2 billion and Unix servers declined by 14.2 percent to $2.1 billion.”