Everyone expected the server market to collapse in the second quarter, but the decline is a little worse than anticipated - at least in some segments and geographies.
According to the latest figures coming out of Gartner, global server revenues fell 29.4 per cent to $9.69bn and shipments fell by an equally bad 28 per cent to 1.69 million units. These numbers are as stark as those put out yesterday by IDC, which tracks the market slightly differently and which provides different views into its data (at least publicly) compared to Gartner.
By looking at both sets of public data, you get a better picture than you otherwise might, although it is well short of what the paying customers get to see. Anyway, IDC said server sales plummeted by a 30.1 per cent to $9.8bn in Q2 and that shipments fell by 30.4 per cent. (IDC did not provide an overall shipment number, but it did say that x64 server shipments declined by 30 per cent to 1.4 million units).
Gartner's box counters said that while all geographical regions saw pronounced declines in server shipments and sales in Q2, Europe, the Middle East, and Africa were hit the hardest, with revenues down 35.8 per cent to $3.08bn and shipments down 31.9 per cent to 491,658 machines. In EMEA, Hewlett-Packard, IBM, and Fujitsu took the biggest revenue hits, with HP's sales falling 36.4 per cent to $987m, IBM's falling 38.3 per cent to $933.5m, and Fujitsu's falling 39.3 per cent to $168.6m.
Sun Microsystems did the class average, with sales down 35.5 per cent to $428.1m, and it held onto its number three ranking in Europe behind HP and IBM. Dell did comparatively better than the rest of the EMEA pack, with a decline of only 27.4 per cent to $299.3m. Other vendors - the few that remain such as Bull, NEC, Hitachi, Silicon Graphics, and some whitebox players - accounted for $266.7m in sales, down 29.9, raising the averages a tiny bit.
HP, Dell, and IBM had the largest shipment declines in EMEA while Fujitsu and Sun did better but shipped a lot fewer boxes in EMEA than the big three. Even if you added Fujitsu and Sun together for EMEA shipments, the combined company would be significantly behind number three, IBM, in boxes, and it wouldn't be close to catching number two IBM in terms of sales either.
Gartner said that it expected server spending to be "cautious" through the second half of this year in EMEA and that the market would not return to growth until 2010. The company did say it expected the third quarter to do better than the second, but that's against some easier compares too.
Thanks to the booming Asian economy (well, as long as you don't count Japan), the Asia/Pacific region did better than EMEA, with server units only down 17.2 per cent and revenues only down 15 per cent - and some of that decline is because of the strengthening U.S. dollar. (Gartner did not give constant currency figures for EMEA and AP server sales).
On a global basis, Gartner reckons that IBM was the revenue leader in the server racket in Q2, with $3.15bn in sales, down 27.1 per cent, followed by HP with its $2.8bn in sales, down 30.1 per cent. Dell ranked third globally, with $1.29bn in sales, off only 20.3 percent, followed by staggering Sun, with its $1.04bn in server revenues for Q2, down 36.2 per cent. Fujitsu had 321.7m in sales, down 34.6 per cent, and all other vendors combined for $1.09bn in sales and fell by 34.3 per cent compared to the year-ago quarter.
Another relative bright spot for servers was blade form factors, says Gartner, with had a 13.6 revenue dropoff compared to last year and a 23.6 decline in shipments. So blades gained shared, if you want to feel happy about something.
Gartner doesn't talk about server shipments and sales by operating system, but in its public data breaks, it down into RISC/Itanium machines running some form of Unix and x64 boxes running whatever.
The company reckons that RISC/Itanium Unix boxes accounted for $2.75bn in revenues in Q2, down 31.4 per cent compared to Q2 2008, when sales broke $4bn. Shipments for these machines were down 40.6 per cent, to a tiny 57,789 boxes worldwide. Sun was hit the hardest among Unix vendors in terms of shipments (down 47.2 per cent to 30,997 boxes by Gartner's guesstimation) and in terms of revenues (down 39.8 per cent to $850.3m). IBM, with a mere 16,635 boxes (down only 22.6 per cent from last year's second quarter), was able to extract $1.08bn out of those sales, down only 19 per cent.
It is a fair guess that very few IBM shops are buying small Power-based servers. (I can remember when IBM used to sell that many AS/400 servers a year and most of them were deskside machines, and then sold a larger number of baby RS/6000 servers). Still, Sun is doing better than HP when it comes to Unix iron. HP sold a shockingly low 8,358 machines in the quarter, down 26.3 per cent, and only brought in $713.7m, down 33.6 per cent.
Fujitsu had $60.6m in Unix server sales in the quarter, followed by Bull with $40.2m. Other vendors only accounted for $9.6m in sales for 205 machines. With Fujitsu and Sun selling the same Unix iron and Bull reselling IBM's Power iron, there really are only three Unix vendors left on RISC or Itanium machinery.
The x64 server racket took its lumps too. Shipments declined 27.4 per cent to 1.62 million units, with HP leading the pack with 511,922 boxes out the door in Q2, according to Gartner (down 26 per cent), followed by Dell with 402,187 units (down 30.3 per cent). IBM pushed 206,159 x64 boxes in the quarter (down 26.8 per cent), followed by Fujitsu with 47,387 x64 machines (down 19.5 per cent) and Sun with 32,408 machines (down only 13.9 per cent).
On the x64 revenue front, Sun did amazingly well in terms of stemming the decline, with sales off only 12.3 per cent to $191.3m and letting Sun leap ahead of Fujitsu for the first time on a global basis, since Fujitsu stomached a 27.8 per cent revenue decline for x64 boxes, dropping it to $174.4m in the quarter.
HP was, of course, the leader in global x64 server sales, as it has been since eating Compaq - notwithstanding a few quarters that were restated here and there over the years and are still in contention as far as I know. HP booked $1.9bn in x64 server sales in Q2 according to Gartner, declining 26.4 per cent versus the year-ago quarter. Dell only sells x64 boxes, so its $1.29bn is what it is. IBM had $897m in x64 server sales, off 21.6 per cent and giving it the number three slot considerably ahead of Sun. ®