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Gartner Says Asia Pacific Server Shipments Grew 14 Percent Year-on-Year and Revenue Grew 22.4 Percent in the Fourth Quarter of 2010

Analysts to Discuss Market Trends at the Gartner Infrastructure, Operations and Data Center Summit in Sydney, 15-16 March 2011

 During the fourth quarter of 2010, positive momentum continued in the Asia Pacific server market, resulting in year-on-year shipment growth of 14 percent and 22.4 percent growth in revenues, according to Gartner, Inc.

Speaking ahead of the Gartner Information, Operations and Data Center Summit in Sydney this month, Gartner principal analyst Errol Rasit said the Asia Pacific server market in the fourth quarter saw a continuation of the positive sales trends observed in the previous quarter.

“Strong sales were driven by enterprise buying preferences favouring a richer configuration of rack optimized and blade servers. Unlike the rest of the world, the region saw growth in the RISC/Itanium Unix servers and mainframes. Investment was driven by the largest vertical markets such as financial, telecommunications and government,” said Mr. Rasit.

Revenue from RISC/Itanium Unix servers and mainframes grew 6 percent and 61 percent year-on-year, respectively. x86-based server sales accounted for 97 percent of total shipments in 4Q 2010 whilst revenue share accounted for 57 percent. Revenue from x86 servers grew 31.5 percent year-on-year and shipments grew 14.3 percent.

“In this region, revenue and shipments of blade servers remained the fastest compared to other form factors, such as rack and tower servers,” said Mr. Rasit. HP led the blade market share with 41.3 percent of blades (x86 and non x86) shipped in 4Q 2010. However, IBM gained blade shipment share to 32.4 percent from 29.5 percent in 4Q 2009.

Australia posted year-on-year revenue growth of 57.6 percent in fourth quarter, the fastest in Asia Pacific region due to ongoing investment in mainframes coupled with continuing healthy x86 server sales. For the same period, Hong Kong saw server revenue growing at 28.6 percent rate despite shipments falling 6 percent, since the majority of demand was for more expensive higher end servers. Server providers in China finished 2010 with a revenue increase of 21.8 percent in the fourth quarter resulting in growth for the year at15.9 percent. Server shipments in Korea grew 19.1 percent and revenue climbed 21.8 percent year-on-year with healthy uptake across different server platforms due to the return of active IT spending in key verticals such as financial and public sectors. More modest revenue growth of 18 percent and 12.6 percent were recorded in Taiwan and Singapore correspondingly during the quarter, driven mostly by x86 server sales. x86 servers in these countries recorded a notably higher share of revenue, 67 percent in Taiwan and 69 percent in Singapore during 4Q 2010, up from 56 percent and 58 percent in the same quarter of 2009 respectively.

The top five server vendors in Asia Pacific continued to experience double digit revenue growth year-on-year except Oracle. IBM continued its revenue leadership by passing the US$1 billion mark which was up 30.2 percent from 4Q 2009 and sustained its market share at 43.1 percent (see Table 1), fueled by the robust growth in all of its key server product lines; System x, System z and Power Systems.

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

Top 5 Vendors by Vendor Revenue - Asia Pacific

4Q10

4Q09

4Q10 Market Share (%)

4Q09 Market Share (%)

Year-Over-Year Growth (%)

All Vendors

2,538,322,952

2,074,002,729

100.0%

100.0%

22.4%

IBM

1,092,883,965

839,527,060

43.1%

40.5%

30.2%

HP

748,630,711

679,661,228

29.5%

32.8%

10.2%

Dell

312,986,250

226,435,158

12.3%

10.9%

38.2%

Oracle

108,753,604

135,534,578

4.3%

6.5%

-19.8%

Inspur Electronics

42,265,524

30,500,386

1.7%

1.5%

38.6%

Other Vendors

     232,802,898

     162,344,320

9.2%

7.8%

43.4%

Source: Gartner (February 2011)

Table 2 highlights the top five server vendors by shipments in Asia Pacific. HP, Dell and IBM dominated the market with a combined share of 72 percent. HP stayed in the lead during the fourth quarter with an 11 percent year-on-year shipment increase, thanks to its x86 based platform, ProLiant, which accounted for 97 percent of total servers shipped by HP. ProLiant server shipments alone grew 10.8 percent and revenue rose 24.3 percent during the fourth quarter.

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

Top 5 Vendors by Shipments - Asia Pacific

4Q10

4Q09

4Q10 Market Share (%)

4Q09 Market Share (%)

Year-Over-Year Growth (%)

All Vendors

475,687

417,531

100.0%

100.0%

13.9%

HP

141,644

127,610

29.8%

30.6%

11.0%

Dell

104,137

93,271

21.9%

22.3%

11.7%

IBM

97,262

82,160

20.5%

19.7%

18.4%

Lenovo

27,047

21,600

5.7%

5.2%

25.2%

Inspur Electronics

18,461

15,789

3.9%

3.8%

16.9%

Others

             87,136

             77,101

18.3%

18.5%

13.0%

Source: Gartner (February 2011)

Full Year 2010 Server Market Results

Similar to the global results, Asia Pacific also saw the return of positive growth in 2010 server market, registering an increase of 18.9 percent in shipment and 18.1 percent in revenue from 2009. Particularly x86 servers have represented the catalyst for server growth. Spending had been consistently increasing since the first quarter of 2010. Sales were motivated by server replacements. Users embraced the improved capabilities offered in new Intel and AMD based processors.

In revenue terms, IBM has steadily increased its share for the past five years, standing firm in the leading position. The company recorded 40.6 percent revenue growth in 2010, although its server shipments stayed down in third place behind Dell since 2009 (see Table 3 and 4). HP ranked first in shipments and accounted for 30.7 percent of total servers shipped to Asia Pacific in 2010. HP ProLiant servers were the main driver for growth in 2010. Dell’s performance in 2010 was noteworthy as its revenue increased significantly, up 33 percent from the previous year. The growing demand for the two and four socket blade and rack servers in 2010 helped Dell to achieve this growth.

For blade servers in particular, mature markets such as Australia, Hong Kong, Korea and Singapore displayed much faster penetration in 2010. We expect that Asia Pacific blade servers will continue to record faster growth than the market's average in 2011, about 23 percent in shipment and 21 percent in revenue. Mature markets will continue leading the adoption of blades while emerging markets like China and India will catch up, especially in large enterprises.

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

Top 5 Vendors by Vendor Revenue - Asia Pacific

2010

2009

2010 Market Share (%)

2009 Market Share (%)

Year-Over-Year Growth (%)

All Vendors

8,387,349,458

7,099,442,117

100.0%

100.0%

18.1%

IBM

3,404,888,421

2,840,820,224

40.6%

40.0%

19.9%

HP

2,631,970,590

2,236,087,952

31.4%

31.5%

17.7%

Dell

1,061,865,984

796,713,900

12.7%

11.2%

33.3%

Oracle

484,534,229

584,336,064

5.8%

8.2%

-17.1%

Lenovo

122,630,012

95,042,324

1.5%

1.3%

29.0%

Other Vendors

     681,460,221

     546,441,653

8.1%

7.7%

24.7%

Source: Gartner (February 2011)

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

Top 5 Vendors by Shipments - Asia Pacific

2010

2009

2010 Market Share (%)

2009 Market Share (%)

Year-Over-Year Growth (%)

All Vendors

1,665,433

1,400,596

100.0%

100.0%

18.9%

HP

511,845

413,840

30.7%

29.6%

23.7%

Dell

377,666

311,893

22.7%

22.3%

21.1%

IBM

347,072

302,343

20.8%

21.6%

14.8%

Lenovo

83,413

58,155

5.0%

4.2%

43.4%

Inspur Electronics

53,127

45,988

3.2%

3.3%

15.5%

Others

            292,310

            268,377

17.6%

19.2%

8.9%

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, sub brand, CPU type, CPU group, Max CPU, platform, price band, operating systems and distribution channels.

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