According to IDC‘s Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market declined 17.3% year over year to $10.4 billion in the third quarter of 2009 (3Q09).
Although this is the fifth consecutive quarter of year-over-year revenue decline, the market grew sequentially for the first time since 4Q08. Server unit shipments declined 17.9% year over year in 3Q09, a significant improvement over the 30.1% year-over-year decline experienced in 2Q09, but grew a healthy 12.4% quarter over quarter – the largest sequential unit growth since 2005.
All three server segments – volume, midrange enterprise, and high-end enterprise – experienced year-over-year revenue decline in 3Q09, marking the fourth consecutive quarter in which this has happened. However, the market for volume servers improved sequentially in the quarter as demand is returning to the low end of the market. Volume systems revenue declined 14.7% year over year in the third quarter, the smallest decline for this important market segment since 3Q08. Revenue for midrange enterprise servers declined 23.4% year over year while revenue for high-end enterprise servers declined 19.3% year over year.
IBM and HP ended the third quarter in a statistical tie with 31.8% and 30.9% of overall factory revenue market share respectively. IBM’s overall factory revenues declined 12.9% year over year helped in part by healthy System x and System p sales. HP experienced a 16.8% year-over-year factory revenue decline in 3Q09. Dell experienced a 6.8% revenue decline and maintained third place with 13.5% overall market share in 3Q09, helped in part by strong server sales growth from its Datacenter Solutions business unit.
Sun maintained its fourth place position by posting a 35.0% year-over-year revenue decline and holding 7.5% market share for the quarter as many customers wait for additional product roadmap detail following Oracle’s pending acquisition of Sun. Fujitsu maintained its fifth-place standing in terms of factory revenue, with 5.7% market share in the quarter, an improvement over its 3Q08 market position.
Top-Level Server Market Findings
- Microsoft Windows server revenue was $4.5 billion in 3Q09 showing a 12.8% year-over-year decline and comprising 43.0% of all server revenue in the quarter. Windows servers account for the single largest segment, by operating system, in the worldwide server market.
- Linux server revenue declined 12.6% year over year to $1.5 billion in the quarter. Linux servers now represent 14.8% of all server revenue, up slightly from 14.0% a year ago.
- Unix servers experienced a 23.4% revenue decline when compared with 3Q08. Worldwide Unix revenues were $2.8 billion for the quarter, representing 26.9% of quarterly server spending. IBM gained 5.1 points of share year over year and holds the 3Q09 leadership position, posting 39.5% share in this segment, followed by Hewlett Packard (29.2%) and Sun Microsystems (23.4%) respectively, based on factory revenue.
x86 server factory revenue declined 12.3% year over year in 3Q09 to $6.1 billion. However, x86 factory revenues increased a healthy 18.7% when compared with 2Q09. This is the largest sequential improvement in x86 server revenue in nearly 5 years (since 4Q05). On a year-over-year comparative basis, shipments also continued to slip when compared to 2008 market highs, dropping 17.0% to 1.6 million units. HP led the market with 37.7% factory revenue share as Dell held second place with 23.2% factory revenue share and IBM maintained the third position with 18.5% factory revenue share. Overall, IBM exhibited the strongest x86 performance of the top 3 OEMs, gaining 2.5 points of market share on a 1.2% improvement in year-over-year factory revenue.
After two consecutive quarters of declining year-over-year revenues, the blade server market segment returned to quarterly revenue growth with factory revenue increasing 1.2% year over year on a 14.0% year-over-year shipment decline. Overall, bladed servers, including x86, EPIC, and RISC blades, accounted for $1.4 billion in the third quarter, representing 13.6% of quarterly server revenue. IBM exhibited the strongest blade server performance of the top 5 OEMs, gaining 6.0 points of market share on 27.2% year-over-year factory revenue growth. HP led the market with 50.7% revenue share as IBM held second place with 29.4% revenue share and Dell maintained the third position with 8.9% revenue share.
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