Worldwide Server Market Growth Remains Flat

The latest server shipment stats from Gartner Dataquest show a server market that essentially remained flat for the second quarter of 2002.

Worldwide server shipments totaled 1.08 million for the second quarter, an increase of 0.5 percent over the second quarter of 2001, the preliminary statistics said.

“The weak business environment worldwide continues to have a great impact on the server industry,” said Shahin Naftchi, senior analyst covering servers for Gartner
Dataquest’s Computing Platform Worldwide program.

“Because of customers’ uncertainty of their own business, purchasing high-end servers, changing to a new platform and signing big contracts are still deferred, which elongate the sales cycle. For the time being, customers are focusing on deployments that can yield quick return on investments by purchasing less expensive systems or upgrading their established systems if necessary,” Naftchi noted.

The biggest change this quarter was the combined Hewlett-Packard and Compaq. With Compaq in first place and HP in third for the past several quarters, it’s no surprise that the vendors’ combined 30.5 percent market share puts the merged entity firmly in the lead.

Dell remained in the No. 2 spot, but increased its market share to 18 percent, up from 16 percent one year ago. Sun Microsystems and IBM stayed put in third and fourth place, respectively, despite a 10.8 percent increase for Sun.

With Compaq’s spot freed up, NEC moved into fifth place with 2.2 percent of the market.

Preliminary Worldwide Server Unit Shipment Estimates for 2Q02

Company 2Q02 2Q01 Growth
Shipments Market Share
Shipments Market Share
HP 329,965 30.5 363,482 33.8 -9.2
Dell 194,776 18.0 172,536 16.0 12.9
IBM 156,906 14.5 161,649 15.0 -2.9
Sun 70,718 6.5 63,842 5.9 10.8
NEC 23,281 2.2 22,872 2.1 1.8
Others 306,482 28.3 292,504 27.2 4.5
Total Market 1,082,128 100.0 1,076,885 100.0 0.5

Note: The data for Hewlett-Packard and Compaq has been combined.
Source: Gartner Dataquest (July 2002)

Once again, the U.S. server market fared better than expected, experiencing close to a 10 percent increase, with shipments of 482,647 units, up from 439,163 in the
second quarter of 2001.

Although this growth may prompt speculation that the end of the market downturn is near, and there are signs of unit stabilization in the United States, the market has yet to show signs of consistent revenue growth according to Gartner Dataquest. Analysts from the research firm note that that without a stable revenue stream, it is unclear whether many companies have enough confidence to invest heavily in new server equipment.

The HP-Compaq merger had a significant significant impact on the U.S. vendor rankings. Here too, HP assumed the No. 1 spot with 26.8 percent of the market, this time taking advantage of its combined strength to bump Dell into second place with 24 percent market share. IBM and Sun followed, and Gateway moved into the now-open fifth slot, despite a nearly 25 percent decrease.

“Since the merger of HP and Compaq is still in its early stage, HP is still faced with the challenges of transitioning its product lines and integrating the two corporate
cultures,” said Jeffrey Hewitt, principal analyst for Gartner Dataquest’s Servers Worldwide program.

“On the other hand, the post-merger challenges facing HP may benefit customers if the company decides to offer better prices and attractive contracts to protect its installed customer base,” Hewitt added.

Preliminary U.S. Server Unit Shipment Estimates for 2Q02
Company 2Q02 2Q02 Growth
Shipments Market Share
Shipments Market Share
HP 129,499 26.8 128,467 29.3 0.8
Dell 115,877 24.0 98,856 22.5 17.2
IBM 57,715 12.0 58,264 13.3 -0.9
Sun 36,319 7.5 29,160 6.6 24.6
Gateway 5,500 1.1 7,300 1.7 -24.7
Others 137,737 28.5 117,116 26.7 14.9
Total 482,647 100 107,606 100 9.9
Total Market 419,622 100 390,027 100.0 7.6

Note: The data for Hewlett-Packard and Compaq have been combined.
Source: Gartner Dataquest (July 2002)

Final statistics will be available shortly to clients of Gartner Dataquest’s Servers Quarterly Statistics program. More information about these programs can be obtained at +1 408 468 8000.

News Around the Web