Linux Servers Post Volcanic Growth

With Linux-based machines proving to be the most successful growing server segment, IBM saw its total server sales balloon 10 percent from 2002 to 2003, while Sun Microsystems dropped 15 percent for the same period, according to the latest figures from research company Gartner .

Big Blue’s revenues grew nearly $1 billion from $13.4 billion to $14.8 year-over-year, and the company grabbed 1.7 percentage points to 32 percent of the total server market share. Sun, embattled on several fronts by tough competition and analysts questioning its business decisions, saw its market share dip from 14.6 percent to 11.8 percent over the same period.

At No. 2, HP remained steady, improving its revenues 5 percent from $11.9 billion to $12.5 billion. At 22 percent, Dell enjoyed the most explosive growth on nearly $4 billion in sales, but still remains the smallest of the top server vendors, with only 8.6 percent of the server market.

The strong performances of IBM, Dell, and HP follow a few years of sluggish server sales during the dot-com bust of 2000.

Gartner also broke down the vendor results for Intel, Unix and Linux-based servers. While still billions behind its proprietary mainstay Unix and Intel machines in sales, Linux-based system sales experienced volcanic growth, as many analysts predicted.

In the last few years, HP, IBM and Dell have proven that Linux can be viable in enterprise computing space after investing billions in marketing and research and development to bring products to bear. Customers have begun to believe the fanfare and are buying systems based on the open-source operating system at a prodigious clip.

IBM and HP tied for a 60 percent growth in Linux system sales. However, HP enjoyed the most success in this sector with system revenues growing from $581 million to $927 billion from 2002 to 2003. IBM grew from $345 million to $552 million year-over-year.

Dell, on the strength of its Microsoft Windows-based systems, led the way with 22 percent sales growth for Intel-based systems. IBM and HP followed with 21 percent and 17 percent growth, respectively. HP still dominates this segment with nearly a 34 percent share.

Unix servers sales, which many analysts say are being cannibalized by the explosive Linux system growth, posted the least success. But while Sun and HP saw their sales for these machines dip 16 and 4 percent, respectively, IBM saw a 13 percent revenue increase for its pSeries servers.

In a recent interview, IBM Director of Marketing for pSeries Jim McGaughan said the company’s high-end p690 performed well in 2003, and picked up a major contract in Research Centre Juelich, which is using 41 p690 systems to create Europe’s most powerful supercomputing cluster. p690 systems run from $600,000 to $2 million or more.

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