IBM Holds Lead in Server Market

Investing

Published: February 28, 2013 12:24 pm

Last Updated: April 27, 2020 11:24 pm

The second half of last year was supposed to bring some improvement in server sales following a first half during which customers were sitting on their wallets waiting for new products. The improvement, when it came, was lumpy, according to research firm IDC. That is, sales were good in some places — the U.S., Asia/Pacific, and Latin America — and soft everywhere else.

International Business Machines Corp. (NYSE: IBM) held on to the market share lead in the fourth quarter, claiming 36.5% of sales, identical with its share in the fourth quarter of 2011. Hewlett-Packard Co. (NYSE: HPQ) held on to second place, with market share of 24.8%, down’ 1.8% from its fourth quarter share a year earlier, and Dell Inc. (NASDAQ: DELL) finished third, with share of 15.1%, down just 0.3% from same period in 2011. Oracle Corp. (NASDAQ: ORCL), Fujitsu, and Cisco Systems Inc. (NASDAQ: CSCO) finished in a statistical tie for fourth place with around 3% to 4% share each.

The revenue picture was a bit brighter, with total year-over-year quarterly revenue growth of 3.1%, but the growth was spread unevenly. IBM posted growth of 3.1%, to $5.34 billion for the quarter, while Cisco grew revenue nearly 51%, to $480 million. Dell’s revenue grew 5.7% to $2.22 billion, while HP’s revenue fell 3.2% to $3.63 billion.

IDC noted that average selling prices “increased sharply” in the quarter, with most growth coming at the low and high ends of the server product offerings. Mid-range server revenues declined for the quarter by 10%, while low-end machines posted revenue growth of 4.2% and revenue on high-end machines grew by 6.4%.

Servers powered by Windows from Microsoft Corp. (NASDAQ: MSFT) grabbed 45.8% of revenues, while Linux-based machines garnered 20.4% of revenues, mostly at the expense of Unix-based servers. IBM’s mainframes saw a revenue boost of more than 55%, to $1.8 billion, the first positive spurt after five consecutive quarters of decline.

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