Dell Boosts Share of Shrinking Server Market; HP, IBM Slip Further

By Paul Ausick Updated Apr 27, 8:02PM EDT · Published Aug 28, 10:15AM EDT

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Dell Inc. (NASDAQ: DELL) posted its highest-ever share of the global server market — 18.8% — as competitors International Business Machines Corp. (NYSE: IBM) and Hewlett-Packard Co. (NYSE: HPQ) both lost share. That s the good news for Dell; the bad news is that the worldwide market is shrinking.

According to the latest data from International Data Corp. (IDC), factory revenue in the worldwide server market fell 6.2% in the second quarter of 2013, from $12.64 billion in the second quarter of last year to $11.86 billion. IBM maintained its top spot in both market share and revenue, with a 27.9% share and sales of $3.31 billion. Those totals represent a loss of 1.2% of market share and 10% lower revenue.

HP remained in second place, but like IBM, saw market share decline from 29.5% in the second quarter of 2012 to 25.9% and revenues shrink by 17.5%, from $3.72 billion to $3.07 billion.

Dell’s market share rose from 16.0% to 18.8% and revenues rose 10.3%, from $2.02 billion to $2.23 billion.

Oracle Corp. (NYSE: ORCL) also lost share and posted lower revenues, while fifth place Cisco Systems Inc. (NASDAQ: CSCO) gained 1.5% of market share and saw revenues rise by 42.6%. Cisco’s total second-quarter revenues, however, amounted to just $537 million.

Demand for Windows Server from Microsoft Corp. (NASDAQ: MSFT) fell 5.1% year-over-year, although quarterly Windows Server hardware revenue totaled $5.8 billion, nearly half of all factory revenue for the quarter. Unix-based servers continue to lose share as Linux-based servers continue to post gains. Linux now accounts for 23.2% of all server shipments while Unix servers have dropped to 15.1%, the lowest ever total, according to IDC. IBM’s z/OS accounted for 9.8% server factory revenue.

Data center growth and cloud-based computing are driving what growth there is, but the uncertain economic environment acts as an anchor to sustained gains as server customers seek more efficiency and lower infrastructure costs.

About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.