In-Depth

IBM King of Shrinking Server Market Heap

Sun remains tops in the Unix server market

• By Stephen Swoyer
• 02/27/2003

Research the company published last month noted that overall server shipments increased by 4.2 percent in 2002, even as revenues declined.

IBM generated $13.4 billion in revenue—off by about 1.5 percent from its $13.6 billion in 2001—good for a 31.1 percent share of server market revenues in 2002. Although IBM’s total includes sales of its pSeries Unix and xSeries Intel servers, it also encompasses big ticket items such as Big Blue’s zSeries mainframes and iSeries minicomputers. Big Blue grew its overall market share by 2.1 percent in 2002, Gartner Dataquest found.

Hewlett-Packard Co. (HP) finished a distant second behind IBM, with $10.8 billion in revenue, but recorded a 13 percent decline in server revenues. It was a rough year for HP, which markets RISC-Unix and Intel servers, in addition to the proprietary OpenVMS and Non-Stop Himalaya systems that it obtained as a result of its acquisition of Compaq. During 2002, HP controlled 25.2 percent of server market revenues—a 1.4 percent decline from 2001.

Despite controlling 38 percent of the Unix market, Sun Microsystems Inc. registered a more than 10 percent drop in revenue, from $7.25 billion in 2001 to $6.5 billion in 2002. Sun controlled 15.1 percent of the overall server market—a 3 percent decline from 2001.

Unix Market Takes a Beating

While Sun was tops in the Unix market, HP notched a 30 percent share on $5.2 billion in revenue. As it has in the past, Big Blue brought up the rear, with a 21 percent share on $3.6 billion in revenue.

In terms of market share growth, however, IBM led the way with a 1.1 percent overall gain—more than twice that of Sun, which was second with a .5 percent increase. HP was last with .3 percent.

Late last year, Gartner Dataquest predicted that sales of Intel servers would finally surpass those of RISC-Unix in 2003. The same report predicted that the server market would again experience growth in 2003.

Linux Juggernaut

While most segments of the server market declined in 2002, sales of servers outfitted with the Linux operating system notched greater than 60 percent year-over-year growth. Earlier, Dataquest indicated that sales of Linux servers surged by 90 percent in Q4 2002 alone.

IBM was the biggest revenue generator in the Linux market, with $759 million in sales—good for 37 percent of the market. HP finished second with $507 million in revenue—approximately 25 percent of the market.