worldwide Server Shipments Grew 13 Percent, While Industry Revenue Grew 3 Percent in Second Quarter of 2006

Gartner: worldwide server shipments for the second quarter of 2006 increased 12.8 percent. worldwide server revenue totaled $12.4 billion for the quarter, as worldwide servers shipments reached 2 million units.

The two server categories that exhibited the greatest strengths were x86 and blade servers . x86 servers and x86 blade servers continue to be the systems of choice for growing the front and middle tiers of the Web infrastructure.

RISC-Itanium Unix servers grew 1.8 percent in shipments for the quarter but dropped a more significant 2.6 percent in revenue . This segment continues to be hotly contested on a global basis, but suffered from constrained revenue overall in the second quarter.

IBM continued to lead the worldwide server market based on revenue (see Table 1). IBM’s System x/x Series and System z/z Series grew during the second quarter of 2006, but it experienced declines in System i/i Series and System p/p Series which resulted in a slight overall revenue decline of 1.7 percent. IBM did manage to increase its shipments 13.8 percent, which allowed it to gain one-tenth of one percent of worldwide server shipment share for the quarter. IBM retained its overall blade server lead in revenue and shipments as its blade server shipments increased 45.4 percent in the quarter.

Table 1 worldwide: Server Vendor Revenue Estimates for Second Quarter of 2006 (U.S. Dollars)

Company	2Q06 Revenue	2Q06 Market Share (%)	2Q05 Revenue	2Q05 Market Share (%)	2Q05-2Q06 Growth (%)
IBM	3,634,164,610	29.2	3,697,501,606	30.5	-1.7
Hewlett-Packard	3,392,620,021	27.3	3,527,292,590	29.1	-3.8
Sun Microsystems	1,633,288,965	13.1	1,436,571,496	11.8	13.7
Dell, Inc.	1,305,278,118	10.5	1,329,024,692	10.9	-1.8
Fujitsu/Fujitsu Siemens	562,448,145	4.5	521,989,680	4.3	7.8
Other Vendors	1,914,342,111	15.4	1,628,788,576	13.4	17.5
Total	12,442,141,970	100.0	12,141,168,640	100.0	2.5

Source: Gartner Dataquest (August 2006)

In server shipments, Hewlett-Packard dropped 0.1 percent in share, but it retained its worldwide server shipment lead and extended the share gap between it and second-place Dell by just over 2 percentage points (see Table 2). HP’s year-over-year shipment growth was 12.5 percent in total. HP’s ProLiant and Integrity product lines increased 13.4 percent and 7.9 percent, respectively, while HP’s remaining server brands fell for the period. These shipment dynamics dragged HP’s overall revenue down 3.8 percent for the period.

Sun Microsystems posted significant annual growth in shipments and revenue for the period — 13.1 and 13.7 percent respectively. The only other global vendor to have growth in the second quarter for revenue and shipments was Fujitsu/FSC. Dell did manage to increase server shipments by 2.3 percent over the same quarter last year, but it experienced a drop in server revenue of 1.8 percent for the same period.

Table 2 worldwide: Server Vendor Shipments Estimates for Second Quarter of 2006 (Units)

Company	2Q06 Shipments	2Q06 Market Share (%)	2Q05 Shipments	2Q05 Market Share (%)	2Q05-2Q06 Growth (%)
Hewlett-Packard	555.589	27.6	493,910	27.7	12.5
Dell Inc.	432,850	21.5	423,195	23.8	2.3
IBM	315,495	15.7	277,232	15.6	13.8
Sun Microsystems	107,167	5.3	94,728	5.3	13.1
Fujitsu/Fujitsu Siemens	51,657	2.6	50,551	2.8	2.2
Other Vendors	546,753	27.2	441,674	24.8	23.8
Total	2,009,511	100.0	1,781,290	100.0	12.8

orldwide server shipmentsPubl 20060823