Servers numbers up, but margins slip

Worldwide server shipments for the first quarter of 2008 increased 7.6% over the same quarter last year, while worldwide server revenue for the same period climbed 4.3% according to Gartner, Inc. Worldwide server revenues totalled $13.6bn for the quarter, as worldwide servers shipments reached just under 2.3 million units.

"There were a number of dynamics that affected the market to produce an initial quarter of growth for 2008,” said Jeffrey Hewitt, research vice president at Gartner. “For example, x86 server replacements were on an upswing as the year commenced, we continued to see build outs of large Web datacenters, and emerging-market growth forged ahead.”

“RISC-Itanium Unix servers fell in shipments but showed a small amount of growth in revenue,” Mr Hewitt said. “In this segment, shipments fell 8.4% while revenue grew 3.7% for the quarter.”

HP and IBM continue to vie for market leadership in the worldwide server market based on revenue. HP took the overall revenue share lead over IBM by a narrow 0.7% for the quarter. HP had increases in both its ProLiant and HP Integrity brands which offset some revenue declines in its other brands.

This produced a year-to-year revenue increase of 10.3% for the period and pushed HP’s share up 1.6%. HP also increased its worldwide blade server revenue share to just over 13% compared to the same quarter last year. Dell, Fujitsu/FSC, and IBM all had revenue growth for the period at 6.6%, 4.9% and 2.1% respectively. Sun was the only global vendor not to have server revenue growth—it had a slight decline at just less than 1%.