August 26, 2005 5:45 PM PDT

Sun dethroned in Unix market--maybe

A correction was made to this story. Read below for details.
IBM and Hewlett-Packard have narrowly edged past longtime leader Sun Microsystems in the worldwide market for Unix servers--depending on who you're listening to.

In the second quarter of 2005, IBM's Unix server revenue was 31 percent of the $4.3 billion market, according to analyst research firm IDC, while HP had 30 percent and Sun 29.5 percent. Sun has lost its lead in various quarters before, but until now had kept the top rank for the second quarter, the last in the Santa Clara, Calif.-based company's fiscal year and one in which its sales typically are stronger.

IDC released its figures Friday. But those released Wednesday by a rival firm, Gartner, tell a different tale, with Sun holding its Unix lead. Gartner's figures gave Sun 33 percent of a $4.2 billion market, with HP at 29 percent and IBM at 28 percent.

The two analyst firms might not agree on the precise ranking, but they agree in the general direction: IBM has been gaining at Sun's expense. Gartner, for example, showed IBM's Unix revenue increasing 33 percent, HP's increasing 6 percent and Sun's decreasing 7 percent.

Sun prefers to steer market-watchers toward unit shipments rather than revenue, arguing that "volume begets volume": Large quantities of servers mean large numbers of customers who become candidates for future sales.

Looking at units also puts Sun in a more flattering light. "In terms of shipments, Sun is always outshipping IBM and HP," said IDC analyst Jean Bozman.

Unix servers are a major part of the overall server market, which IDC said grew 5.6 percent to $12.2 billion in the second quarter. They're often used for more demanding tasks such as running corporate financial transactions or large databases, and such high-end systems often lead to sales of accompanying storage systems, software and services.

Sales of midrange Unix servers--those costing between $25,000 and $249,999--grew 15.6 percent in the second quarter, while high-end systems--those costing $500,000 and up--grew 19.2 percent, Bozman said.

Gartner and IDC both rank IBM as the overall market leader, with HP second, Sun third and Dell a close fourth. Gartner also detailed results for server market segments:

•  For Linux servers, Gartner ranked IBM top with $420 million in sales in a market segment that grew 32 percent to $1.5 billion in the quarter. HP was second with $363 million, and Dell third at $253 million.

•  The blade server market grew 567 percent to $419 million, Gartner said. IBM continues to lead it with 42 percent share to HP's 34 percent. Dell is a distant third at 8 percent.

•  Among x86 servers--those using server processors such as Intel's Xeon and Advanced Micro Devices' Opteron--HP continues to lead the $5.9 billion market, Gartner said. HP had revenue of $2 billion to Dell's $1.3 billion and IBM's $1 billion. Sun, which entered the x86 market recently after years shunning it, is still a minor player with revenue of $108 million, but that revenue grew at 192 percent and was enough for a sixth-place finish.

 

Correction: This story misstated Linux server revenue for some companies in the second quarter of 2005. According to Gartner, IBM had $420 million in sales, HP had $363 million and Dell had $253 million.

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Who cares about revenue?
Leader in revenue only means they're gouging customers more...if they sell fewer machines than Sun, but make more money, then they're charging more money per machine!
Posted by toddbernhard (67 comments )
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