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Server Sales Were Healthy in Q2: IDC

Worldwide server revenues surged 11% to $10.9 billion

Worldwide server revenues surged 11% to $10.9 billion in Q2, according to IDC, which calls it the second consecutive quarter of year-over-year revenue growth, the fastest quarterly revenue growth since 2003 and the fourth consecutive quarter of improving server market demand.

Trouble is that was two months ago and, what with Wall Street saying PC demand has subsequently tanked, one would really like to know whether server sales are still looking better.

Based on its Q2 numbers IDC says it "continues to see widespread infrastructure refresh occurring across all geographies. While much of this refresh is occurring first in x86-based servers, IDC expects the recovery to extend to Unix and mainframe platforms in the second half of 2010."

Guess we'll see.

Anyway, server unit shipments increased 23.8% in Q2, indicating there was real appetite out there.

Blades, regardless of species, had the ascendancy. They saw the largest revenue growth of any market segment, IDC said, up 40.3% year-over-year to $1.6 billion on shipments up 13.6%. More than 80% of all blade revenue was x86, representing 18.9% of all x86 server revenue.

IDC attributes the trend to blades' enhanced virtualization, management and I/O capabilities. It said "customers are leveraging these technologies as part of converged systems that are a building block to future internal cloud infrastructures."

HP maintained the number 1 spot in server blades, with 58.8% revenue share. IBM finished with 22.6% revenue share.

x86 server revenues were up 31.7% to $7 billion on shipments up 25.8% to 1.8 million servers, positively impacting Windows server demand. IDC put Windows server revenue at $5 billion, representing 46.5% of overall quarterly factory revenue. Linux server revenues were up 30.1% to $1.8 billion, representing 16.8% of all server revenue, up 2.5 points over last year.

Demand for mid-range servers was up 15.6%, the first positive growth in the segment in nine quarters while demand for high-end enterprise systems continued to be soft with revenues down 27.2% year-over-year, the seventh consecutive quarter of contraction in the high end.

HP, which in Q2 was still run by Mark Hurd, remained number one with 32.5% of worldwide server factory revenue, up 26%. IBM was number 2 with 29.8%, down 3.2% ahead of the refresh of its Power Systems and mainframes. A year ago positions were reversed - IBM had 34.2% of the revenues and HP only 28.6%. IBM lost 6.4 points.

Unix server revenue overall was down 7.3% to $2.9 billion, representing 26.3% of quarterly server spend (down a huge 52 points over 2Q09). However IDC expects the decline in Unix to moderate this half.

Dell was third worldwide with 15.3% of revenues, up 36.5% to gain 2.9 points of market share. Oracle, the new Sun, was fourth with 5.9% of revenue, with its market share dropping to 8.6%. Fujitsu's revenues were up a 7.9%, giving it a market share of 3.4%.

Each of the top 5 server vendors had positive x86 server revenue growth in the quarter. HP led the market with 39.2% revenue share. Dell retained second place, with 23.9% and IBM was third with 16.7%. IDC says the quarter saw the fastest year-over-year factory revenue growth in x86 servers in more than 10 years.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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