Press Release

STAMFORD, Conn., February 24, 2011 View All Press Releases

Gartner Says 2010 Worldwide Server Market Returned to Growth with Shipments Up 17 Percent and Revenue 13 Percent

Server Market Ended the Year with Positive Fourth Quarter Shipments and Revenue Growth

 

Putting the final touches on a year of worldwide server market growth, fourth quarter 2010 worldwide server shipments grew 6.5 percent year on year, while revenue climbed 16.4 percent, according to Gartner, Inc.

"2010 was a year that saw pent-up x86-based server demand produce some significant growth on a worldwide level," said Jeffrey Hewitt, research vice president at Gartner. "The introduction of new processors from Intel and AMD toward the end of 2009 helped fuel a pretty significant replacement cycle of servers that had been maintained in place during the economic downturn in 2009."

"Ongoing blade server growth and the introduction of 'skinless' servers in the x86 segment also helped push 2010 results into double-digit growth rates, despite ongoing constraints in RISC/Itanium Unix platforms. The introduction of new mainframe platforms from IBM helped to drive increases in the mainframe segment with 68.3 percent revenue growth of IBM's System Z platforms in the fourth quarter," Mr. Hewitt said.

From a geographic perspective, all regions, with the exception of Japan, grew in revenue with the three highest growth rates shown by North America (24.5 percent), Asia/Pacific (22.4 percent) and Latin America (12.3 percent). Europe, Middle East and Africa (EMEA) grew by 10.4 percent and Japan declined by 4.4 percent.

IBM led the worldwide server market, based on revenue in the fourth quarter of 2010 (see Table 1). The company ended the year with $5.2 billion in revenue for the fourth quarter of 2010 accounting for 35.5 percent of worldwide server revenue. This was up 2.8 percent, compared with the fourth quarter of 2009. IBM's growth was fueled by its System Z and System X product lines.

Of the top five global vendors, IBM, HP and Dell delivered double-digit growth rates in terms of revenue, while Oracle and Fujitsu experienced revenue declines in the fourth quarter of 2010.

Table 1
Worldwide: Server Vendor Revenue Estimates, 4Q10 (U.S. Dollars)

Company

4Q10

Revenue

4Q10 Market Share (%)

4Q09

Revenue

4Q09 Market Share (%)

4Q09-4Q10 Growth (%)

IBM

5,213,930,594

35.5

4,125,145,125

32.7

26.4

HP

4,457,791,867

30.4

3,951,339,524

31.3

12.8

Dell

1,920,161,049

13.1

1,519,699,047

12.1

26.4

Oracle

805,582,264

5.5

960,830,493

7.6

-16.2

Fujitsu

560,391,957

3.8

563,384,642

4.5

-0.5

Other Vendors

1,720,448,653

11.7

1,486,168,259

11.8

15.8

Total

14,678,306,384

100.0

12,606,567,089

100.0

16.4

Source: Gartner (February 2011)

In server shipments, HP remained the worldwide leader for the fourth quarter of 2010 (see Table 2) with a year-on-year shipment increase of 6.9 percent.

The results for the quarter were centered around x86 server demand, which increased in shipments by 7.1 percent and revenue by 20.0 percent for the fourth quarter of 2010.

Table 2
Worldwide: Server Vendor Shipments Estimates, 4Q10 (Units)

Company

4Q10

Shipments

4Q10 Market Share (%)

4Q09

Shipments

4Q09 Market Share (%)

4Q09-4Q10 Growth (%)

HP

767,026

32.2

717,212

32.1

6.9

Dell

515,274

21.6

484,702

21.7

6.3

IBM

332,254

14.0

320,007

14.3

3.8

Fujitsu

75,716

3.2

67,391

3.0

12.4

Oracle

36,614

1.5

61,866

2.8

-40.8

Other Vendors

654,544

27.5

584,007

26.1

12.1

Total

2,381,428

100.0

2,235,185

100.0

6.5

Source: Gartner (February 2011)

Full Year 2010 Server Market Results
2010 marked a return to growth with increases of 16.8 percent in worldwide server shipments and 13.2 percent in revenue (see Tables 3 and 4). These results were fueled primarily by a replacement of aging x86 servers, which had been maintained through the economic doldrums of 2009. Some cloud-related build-out is also likely to have fueled increases, particularly in North America, while emerging regions, such as Asia/Pacific and Latin America, also added to the growth for the year.

Blade servers posted a revenue increase of 29.5 percent and a shipment increase of 12.6 percent for the year. HP was the 2010 leader in blade shipments with 47.3 percent share, followed by IBM with 25.4 percent share. These two vendors continued to dominate this form factor, although Dell also saw a modest share increase, and Cisco achieved a low, single-digit share in its first full year in the server market.

The outlook for 2011 suggests that growth will continue, but at lower levels, because the highest level of the replacement cycle for x86 servers was probably reached in 2010. These increases continue to be buffered by the use of x86 server virtualization to consolidate physical machines as they are replaced.

HP and IBM are tussling for outright market leadership as both vendors achieved revenues of over $15 billion for 2010, both with a market share of 31 percent. HP achieved a stronger year on year growth rate of 18.9 percent to IBM’s 9.2 percent. HP has demonstrated strength with the results of its x86 ProLiant line all year, although IBM’s System Z line was key in its improved results in the fourth quarter. 2011 will be a critical year in determining which of the relative strengths of these two leading vendors are best aligned to the market direction.

Table 3
Worldwide: Server Vendor Revenue Estimates, 2010 (U.S. Dollars)

Company

2010

Revenue

2010 Market Share (%)

2009

Revenue

2009 Market Share (%)

2009-2010 Growth (%)

HP

15,332,765,040

31.4

12,892,126,551

29.9

18.9

IBM

15,045,308,591

30.8

13,771,714,540

32.0

9.2

Dell

7,187,356,464

14.7

5,472,746,063

12.7

31.3

Oracle

3,095,981,831

6.3

3,762,609,892

8.7

-17.7

Fujitsu

2,141,541,849

4.4

2,037,072,203

4.7

5.1

Other Vendors

5,990,286,849

12.3

5,149,979,775

12.0

16.3

Total

48,793,240,624

100.0

43,086,249,024

100.0

13.2

Source: Gartner (February 2011)

Table 4
Worldwide: Server Vendor Shipments Estimates, 2010 (Units)

Company

2010

Shipments

2010 Market Share (%)

2009

Shipments

2009 Market Share (%)

2009-2010 Growth (%)

HP

2,798,773

31.7

2,386,201

31.5

17.3

Dell

2,070,118

23.4

1,706,721

22.6

21.3

IBM

1,155,451

13.1

1,024,054

13.5

12.8

Fujitsu

289,782

3.3

243,967

3.2

18.8

Oracle

162,340

1.8

237,405

3.1

-31.6

Other Vendors

2,359,128

26.7

1,965,991

26.0

20.0

Total

8,835,593

100.0

7,564,340

100.0

16.8

Source: Gartner (February 2011)

In Europe, the Middle East and Africa (EMEA), server shipments surpassed 706,000 units in the fourth quarter of 2010, an increase of 4.4 percent from the same period last year (see Table 4). Server revenue totaled $4.3 billion in the fourth quarter of 2010, a growth of 10.4 percent from the same quarter last year (see Table 5).

“The fourth quarter rounded off an encouraging year for the server market in EMEA with each quarter seeing positive year to year growth rates for both shipments and revenues,” said Adrian O’Connell, research director at Gartner. “EMEA was particularly badly hit by the downturn in 2009 and, although economic concerns continue across much of the region, the server market has shown good momentum during 2010.”

X86 systems have demonstrated consistently strong growth during the year but this was enhanced by IBM’s System Z driving good high-end revenues in the fourth quarter as well. The only area of the market that remained weak is the UNIX segment. The UNIX segment saw revenue decline 18.7 percent in the fourth quarter of 2010. UNIX vendors are squeezed between new investments in x86 platforms and the entrenched but strong installed base of System Z. “The challenge for UNIX vendors in 2011 is to limit migrations and to try to encourage new investment in these platforms,” said Mr. O’Connell.

Mr. O’Connell added: “We also need to recognize that the market is still in a fairly tentative recovery mode. Many companies are still in cost-containment mode and, although 2010 growth levels were strong, we’re still some way off the revenue highs that we saw in 2007.”

In the fourth quarter of 2010, of the top five vendors, HP, Dell and Fujitsu exhibited growth above the average market in shipment terms. HP held the No. 1 position, with shipments growing at 8 percent year-on-year. Dell, ranked No. 2, grew 5.4 percent year-on-year. Fujitsu had the strongest growth with 20.5 percent.

In the x86 market, total volume in EMEA grew 5.5 percent in the fourth quarter of 2010. “The x86 market is becoming ever more critical to the overall server market,” said Mr. O’Connell. “X86 revenue increased 17.4 percent in the fourth quarter and accounted for two thirds of total server revenue. Virtualization, blades, 4 and 8 socket systems and richer configurations are all driving these strong revenue levels.”

Overall, RISC and Itanium Unix revenues declined 19.3 percent in the fourth quarter of 2010. IBM led the segment in the fourth quarter of 2010, albeit with a growth of 2.7 percent. This resulted in a share increase to 38.3 per cent. Second-ranked HP declined 15.3 percent and third-ranked Oracle declined 45.8 percent. “These weak results are compounded by product transitions but are also indicative of the positioning difficulties that UNIX vendors are facing. The challenge remains for UNIX vendors to move upstream and fight for mainframe business, whilst also defending against Windows and Linux encroachments into their own installed bases,” said Mr O’Connell.

Table 5
EMEA: Server Vendor Revenue Estimates, 4Q10 (U.S. Dollars)

Company

4Q10

Revenue

4Q10 Market

Share (%)

4Q09

Revenue

4Q09 Market

Share (%)

4Q09-4Q10

Growth (%)

HP

  1,565,689,575

36.4

  1,443,545,108

37.0

8.5

IBM

  1,388,060,314

32.3

  1,164,043,329

29.9

19.2

Dell

      441,637,041

10.3

      340,412,586

8.7

29.7

Fujitsu

      252,238,215

5.9

      220,199,623

5.6

14.5

Oracle

      217,507,212

5.1

      376,587,374

9.7

-42.2

Other Vendors

      438,815,084

10.2

      352,704,831

9.0

24.4

Total

  4,303,947,440

100.0

  3,897,492,851

100.0

10.4

Source: Gartner (February 2011)

Table 6
EMEA: Server Vendor Shipments Estimates, 4Q10 (Units)

Company

4Q10

Shipments

4Q10 Market

Share (%)

4Q09

Shipments

4Q09 Market

Share (%)

4Q09-4Q10

Growth (%)

HP

             307,959

43.6

             285,206

42.2

8.0

Dell

             118,874

16.8

             112,777

16.7

5.4

IBM

                98,172

13.9

             106,746

15.8

-8.0

Fujitsu

                43,007

6.1

                35,691

5.3

20.5

Oracle

                10,912

1.5

                21,382

3.2

-49.0

Other Vendors

             127,279

18.0

             114,620

16.9

11.0

Total

             706,202

100.0

             676,420

100.0

4.4

Source: Gartner (February 2011)

Additional information is available to subscribers of Gartner Dataquest's Servers Quarterly Statistics Worldwide program. This program provides worldwide market size and share data by vendor revenue and unit shipments. Segments include: region, vendor, vendor brand, subbrand, CPU type, CPU group, Max CPU, platform, price band, operating systems and distribution channels.

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