HP outperforms IBM in Q1 server sales

Hewlett-Packard knocked IBM from the top spot in worldwide server revenue during the first quarter, as the market for x86 systems picked up but sales of Unix and mainframe systems continued to decline, according to Gartner said on Tuesday.

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Hewlett-Packard knocked IBM from the top spot in worldwide server revenue during the first quarter, as the market for x86 systems picked up but sales of Unix and mainframe systems continued to decline, Gartner said on Tuesday.

Worldwide server revenue climbed 6 percent from a year earlier, to US$10.8 billion. Unit shipments climbed 23 percent to 2.1 million, meaning selling prices were generally lower.

The economy is on the mend and organizations are upgrading older servers, said Jeffrey Hewitt, research vice president at Gartner. New Xeon processors from Intel were an added impetus to buy new equipment, he said. But the industry hasn't returned yet to the quarterly highs it posted in 2008.

Revenue from servers based on x86 chips was $7.18 billion, up 32 percent, while unit shipments climbed to 2.06 million. Revenue from high-end RISC and Itanium-based servers declined by 27 percent, and the "other" category -- mostly mainframes -- declined by 15 percent.

The trend favoured HP and Dell, who saw the biggest revenue gains during the quarter, and hurt Oracle especially.

HP's server revenue totaled $3.39 billion, up 15.9 percent year over year to give it 31.5 percent of the market. IBM's revenue dropped by 2.1 percent to $3.05 billion, giving it 28.4 percent. In third place was Dell, whose revenue grew by 35.5 percent to $1.67 billion, a 15.6 percent market share.

Oracle saw steep declines despite assuring customers that it will continue to invest in Sun's server business. Shipments dropped 29.5 percent year over year to 42,528 units, while revenue declined 38.7 percent to $598 million. Uncertainty continues to harm the business, but some buyers may also be waiting for new Ultrasparc processors, Hewitt said.

He's not writing off Oracle's hardware business yet, however; he noted that sales cycles on RISC servers are usually longer, and new chips are on the way.

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