Outlook Series | Q2 '08: Server Shipments Up 12%

Q2 '08: Server Shipments Up 12%

August 26, 2008

Worldwide server shipments for the second quarter of 2008 increased 12.2 percent over the same quarter last year, while worldwide server revenue for the same period climbed 5.7 percent . Worldwide server revenue totaled $13.8 billion for the second quarter, as worldwide servers shipments reached 2.3 million units.

"In spite of economic constraints in some markets like the United States, on a worldwide basis, servers continued to grow in the second quarter of the year,” said Jeffrey Hewitt, research vice president at Gartner. “The most significant driver in the quarter continued to be an upswing in x86 server replacements that started in the first quarter. This, coupled with Web data center build outs and growth in emerging markets, produced solid Q2 results.”

“RISC-Itanium Unix servers fell 7.9 percent in shipments but grew 9.4 percent in revenue indicating that higher-end systems were the hardware platforms that drove sales in this space,” Mr. Hewitt said.

IBM maintained the revenue lead in the worldwide server market for the quarter (see Table 1). It had solid increases in both its System p and System z brands which offset some revenue declines in its other brands. This produced a year-to-year revenue increase of 11.5 percent for the period and pushed IBM’s share up 1.6 percent. IBM’s overall revenue share lead over second-place HP was 3.6 percent for the quarter.

Dell and HP had revenue increases for the period. Fujitsu/Fujitsu Siemens and Sun both experienced revenue declines.

Table 1

Worldwide: Server Vendor Revenue Estimates, 2Q08 (U.S. Dollars)

Company	2Q08 Revenue	2Q08 Market Share (%)	2Q07 Revenue	2Q07 Market Share (%)	2Q07-2Q08 Growth (%)
IBM	4,315,049,933	31.2	3,870,937,408	29.6	11.5
Hewlett-Packard	3,811,555,998	27.6	3,703,108,934	28.4	2.9
Dell Inc.	1,795,295,686	13.0	1,561,405,756	12.0	15.0
Sun Microsystems	1,633,955,195	11.8	1,753,434,866	13.4	-6.8
Fujitsu/Fujitsu Siemens	492,821,856	3.6	493,498,046	3.8	-0.1
Other Vendors	1,761,944,639	12.8	1,678,799,374	12.9	5.0
Total	13,810,623,307	100.0	13,061,184,384	100.0	5.7

Source: Gartner (August 2008)

In server shipments, Hewlett-Packard grew 8.7 percent compared to the second quarter of 2007, and retained its worldwide server shipment lead. The share gap between it and second-place Dell decreased 3.4 percentage points for the quarter (see Table 2). HP finished the quarter with a 30.2 percent shipment share for the period. HP’s growth came from its ProLiant, HP Integrity and HP NonStop brands. HP pushed its blade server shipment share upward 3.6 percent to reach a total of 45.2 percent for the quarter.

Dell posted a 24.2 percent growth for the quarter. All the remaining global vendors, Fujitsu/Fujitsu Siemens, IBM and Sun all had shipment increases in the single digits for the period.

Table 2

Worldwide: Server Vendor Shipment Estimates, 2Q08 (Units)

Company	2Q08 Shipments	2Q08 Market Share (%)	2Q07 Shipments	2Q07 Market Share (%)	2Q07-2Q08 Growth (%)
Hewlett-Packard	706,724	30.2	650,371	31.2	8.7
Dell Inc.	577,163	24.7	464,650	22.3	24.2
IBM	308,835	13.2	295,088	14.1	4.7
Sun Microsystems	96,510	4.1	94,969	4.6	1.6
Fujitsu/Fujitsu Siemens	61,077	2.6	59,142	2.8	3.3
Other Vendors	590,732	25.2	522,442	25.0	13.1
Total	2,341,041	100.0	2,086,662	100.0	12.2

Source: Gartner (August 2008)