Server market shows some pep

Computer manufacturers saw unit sales of servers jump by just over 10 percent worldwide during the first quarter, according to a new report from market researcher Gartner.

Unit sales of the heavy-duty computers, used to conduct transactions, crunch numbers and store data on computer networks, totaled 1.2 million units during the first quarter, a year-over-year increase of 10.4 percent, Gartner said.

The growth in server sales during the first three months of the year outpaced that of the overall PC market. Worldwide PC unit shipments grew 5.5 percent during the quarter, Gartner said earlier this month. Gartner's PC market share figures include desktops, notebooks and servers priced under $25,000.

But Gartner said that several factors are still holding back the market as a whole and are, in particular, reducing unit sales of more expensive servers.

"The worldwide server market performed better than expected in the first quarter of 2003, but the threat of a lingering war with Iraq, combined with a weak economy, still had an effect on IT spending during the quarter," Shahin Naftchi, a Gartner analyst, said in a statement. "As a result, the life cycle for existing large systems was extended and corporate buyers delayed purchases of high-end equipment, preferring the quick returns from short-term investments instead."

Hewlett-Packard shipped the most servers during the first quarter. It sent out 356,692 units, giving it 29.1 percent of the worldwide market, the new report said. Dell Computer moved 248,227 servers for a 20.2 percent share of the market, making it the world's second largest manufacturer of servers.

Servers are an important and profitable market for Dell and HP, which have been battling for market dominance. The companies' positions atop the worldwide PC market were reversed in the first quarter, during which Dell accounted for 16.9 percent of the market and HP 15.6 percent, Gartner said.

In the server realm, IBM was the third most prolific shipper in the first quarter of 2003, sending out 182,034 units, garnering 14.8 percent of the market. Sun Microsystems and Fujitsu-Siemens were in fourth and fifth positions with 60,627 units (4.9 percent) and 28,709 units (2.3 percent), respectively.

In the United States, Dell and HP swapped places. Dell took the No. 1 spot with 135,215 servers shipped, or 27.1 percent of the market. HP was close behind with 126,364 units shipped, earning it a market share of 25.3 percent.

IBM, Sun Microsystems and Gateway were, respectively, third, fourth and a distant fifth in the U.S. market, which totaled 499,609 units, Gartner said.