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RealTime IT News

HP Elbows Past IBM In Servers

IT researchers Gartner and IDC both released first quarter 2007 server sales figures that show HP is flattening the competition, even the mighty IBM, although IBM is showing there's still life left in its venerable mainframe.

The two research firms are usually pretty close in their estimates and this quarter there were only a few significant differences. Gartner reported that worldwide server shipments rose six percent over the same quarter last year to 2.1 million units, while revenue for the same period climbed 4.5 percent to $12.9 billion for the quarter.

IDC projects the market to have grown by 4.9 percent year-over-year to $12.4 billion in the first quarter of 2007, with unit shipments up 4.6 percent. It did not give a unit sales figure.

Where they differ is who is in the lead. IDC puts HP  in the lead in Q1 of '07 with $3.615 billion in sales and 29.2 percent of the market and IBM  in second place with $3.579 billion in revenue and 28.9% of the market.

Gartner reverses the positions, with IBM in the lead at $3.832 billion in revenue and 29.8 percent of the market and HP in second place with $3.635 billion and 28.2 percent. This can be chalked up to methodologies for determining sales.

What's not in doubt is HP's execution. That, said Jed Scaramella, research analyst in IDC's enterprise computing group, is excellent. "HP has said they are now focused on not selling technology for technology's sake. They talk about how every piece of technology relates back to the business case for the customer," he told internetnews.com.

HP's strategy of sales is to get away from emphasizing "speeds and feeds," as Scaramella put it, and adopt "consultative selling" to its sales methodology. Every piece of equipment pitched to a customer is presented on the premise of how it will improve their business, lower costs and improve productivity.

IBM did well, particularly with its System z/z Series mainframes, despite the fact that the mainframe has been repeatedly declared dead or dying for almost two decades. Sun is also doing well, growing slightly if not quickly.

The two research firms also differ on where Dell and Sun fit into the mix. IDC has Sun  in third place, with $1.356 billion in revenue and 10.9 percent of the overall sales, and Dell  in fourth place with $1.346 billion and 10.9 percent of sales.

Gartner listed the gap as much wider, with Dell in third with $1.441 billion in sales for 11.2 percent of the market and Sun in fourth with $1.327 billion in revenue. Either way, Dell's numbers were up, a good sign for the troubled company.

While Sun did enjoy something of a rebound, with sales up six percent over the same quarter in 2006, Scaramella said there are still questions about Sun. "I think what we still want to see is if they moving beyond their installed base," he said. "If they're going to grow they need to sell beyond their [current] customers."

Sales overall this quarter reflected the trend from Q4 of 2006, which was fewer physical units, but more powerful, decked out systems, a trend that shows no signs of abating.