In the fourth quarter of 2009, worldwide server shipments grew 4,5% year-on-year, while revenue fell 3,2 per cent, says Gartner.
“The recovery that began in the third quarter of 2009 based on x86 servers extended into the fourth quarter,” says Jeffrey Hewitt, research vice-president at Gartner. “However, it is important to put this into context. The fourth quarter of 2008 was quite weak, so the fourth quarter of 2009 did not have to produce huge x86 server numbers to result in an increase. At the same time, other segments like RISC/Itanium Unix and mainframes remained constrained and that exerted downward pressure on overall vendor revenue results.
"Blade servers pushed ahead with growth of 11,1% in shipments and 22,1% in vendor revenue for the period. RISC/Itanium Unix servers, on the other hand, dropped 30,5% in shipments and fell 20% in revenue in the fourth quarter," Hewitt adds.
Regions that grew in shipments were Asia/Pacific, the Middle East and Africa, and the US, at 19,6%, 13,4% and 9%, respectively. Canada, Eastern Europe, Japan, Latin America and Western Europe had shipment declines of 9,4%, 13,3%, 1,7%, 6,8%, and 4%, respectively. Regions that grew in vendor revenue were Asia/Pacific, Latin America, and the Middle East and Africa at 9,1%, 22,1%, and 9,4%t, respectively. Canada, Eastern Europe, Japan, the US and Western Europe had sales declines of 1,7%, 26,2%, 6,7%, 5,1%, and 9,2%, respectively.
IBM continued to lead the worldwide server market based on revenue. In the fourth quarter of 2009, IBM's server revenue was about $4,1-billion, reflecting a 5,9% year-on-year decline. IBM's market share was 32,7%, a 1 percentage point decline. System x grew, while System p and System z posted declines for the quarter.
Of the top five global vendors, HP, Dell and Fujitsu grew in revenue for the quarter while IBM and Sun posted declines.
In server shipments, HP remained the worldwide leader for the fourth quarter of 2009 with a year-on-year shipment increase of 3,8%. The ProLiant brand showed growth in shipments while all of its other brands fell in the fourth quarter of 2009 compared with the fourth quarter of 2008.
Of the top 10 vendors in server shipments worldwide, all but NEC and Sun had shipment increases for the period.
The results for the quarter were centred around demand for x86 servers which increased in shipments by 6,3% and in revenue by 14,3% for the fourth quarter of 2009.
2009 was highly challenging in the worldwide server space. Worldwide server shipments declined 16,6% in 2009 compared with 2008, while 2009 server revenue declined 18,3% from 2008.
Blade servers posted a revenue increase of 1,3% and a shipment decrease of 11,4%t for the year. HP was the 2009 leader with blade servers at 46,8% shipment share. IBM was in the number two position at 28,2%. These two vendors continued to dominate this form factor.
The outlook for 2010 suggests a return to shipment growth in the middle or high single digits and revenue growth at a slightly lower level. These increases are being buffered by the use of x86 server virtualisation to consolidate physical machines as they are replaced.
In Europe, the Middle East and Africa (EMEA), server shipments surpassed 676 000 units in the fourth quarter of 2009, a decline of 4% from the same period last year. Server revenue totalled $3,9-billion in the fourth quarter of 2009, a decline of 9,8% from the same quarter last year.
“The EMEA server shipment market exhibited a single-digit decline in the fourth quarter of 2009, which is an improvement from the double-digit decline registered in the third quarter of 2009,” says Errol Rasit, senior analyst at Gartner. “It also exhibited sequential growth from the third quarter of 2009. These recent market results indicate that levels of demand are starting to steadily recover, however customers remain relatively cautious.”
In the x86 market, total volumes in EMEA declined 2,6% compared to the fourth quarter of 2008.”This is a marked improvement from the 22% decline seen in the third quarter of 2009. However, the fourth quarter’s growth is compared to a weaker 2008 result,” says Rasit.
In the fourth quarter of 2009, HP held the number one position, exhibiting a marginal decline of 0,5% and further extended its market share lead. Dell, in the numbe two spot, declined 6,5% in shipments and 8,7% in revenue in the fourth quarter of 2009. IBM, ranked number three, was the only one of the top five vendors to exhibit growth, with a 6% increase in the fourth quarter of 2009. Its performance was primarily driven by its rack-optimised and blade business. Of the top five vendors, Fujitsu exhibited the weakest performance with a decline of 13%, although Fujitsu grew x86 revenues as a result of improved sales with richer configurations and a new blade product.
RISC and Itanium Unix revenues declined 22% in the fourth quarter of 2009. Sun led the segment in the fourth quarter despite a decline of 28% and a loss of 2% revenue share year-on-year. HP, ranked number two, exhibited a revenue decline of 31% year-on-year, while IBM in the number three position saw its revenue decline 9%.
For these three vendors, the slower recovery of RISC IPF Unix compared to x86 in EMEA is similar to global trends. IBM and HP will release major platform refreshes in 2010, which will ultimately delay purchases among some customers in anticipation of the new systems. The acquisition of Sun by Oracle which was not complete in the fourth quarter of 2009 made some customers hold back investment in anticipation of news following the completion of the acquisition.
Bull held the number four position and grew revenue by 13% as a result of strong investment in France. Fujitsu, which ranked number five in this segment, declined revenue by 45% in the fourth quarter of 2009 as a result of increased focus on x86 sales.
In 2009, the second half outpaced the first half in both shipment or revenue terms as the server market began to recover. HP maintained its top position in shipment terms, improving share by 1,3% from 2008. Although Dell and IBM lost market share by less than 1% each, they maintained their respective number two and number three positions. In revenue terms, HP remained the market leader improving share along with second-placed IBM by 0,3%. Sun lost 1% share, declining 33% in 2009.
In the first quarter of 2010, Gartner foresees a continued improvement in server market demand, primarily driven by the x86 segment.
“Based on improvements in the x86 market it is likely the EMEA server market will return to volume growth in the first half of 2010, although revenue will take slightly longer to recover,” says Rasit.