Guild Companies

IDC recently gave IBM the leadership position in revenue market share for the second quarter of 2003, and analysts at rival Gartner seconded that top ranking last week, putting Big Blue at the top of the heap, too, for the quarter. According to Gartner's estimates, IBM's lead over rival Hewlett-Packard was smaller in the United States than in the overall worldwide market, across all server platforms.

Gartner said IBM raked in $3.23 billion in server sales worldwide. That's an increase of 8 percent over last year's second quarter, giving it 30.7 percent share of the $10.52 billion market, which itself was up only 1.3 percent.

IDC, by the way, said server sales were up only two-tenths of a percent, to $10.6 billion, in the same quarter. These two box-counting houses don't usually agree on the finer details of who is winning what, but their data has the same general ups and downs.

HP, says Gartner, only grew revenues worldwide by 1.6 percent in the second calendar quarter--HP reports its financial results a month out of phase with the calendar--attaining $2.84 billion in sales and 27 percent of the worldwide server pie, essentially the same share it held this time last year.

Gartner figures Sun Microsystems' server sales were down 21.4 percent, to $1.46 billion, and that it lost 4 points of market share, with only 13.9 percent of the market. Sun's product mix is shifting toward entry and V series servers, which have lower price tags, and that's having an adverse affect on its top and bottom lines. Dell, according to Gartner, pulled in $944 million in server sales, up 22 percent, giving it 9 percent of the market and an increase of 1.5 points of market share. All other vendors accounted for just over $2 billion in sales in aggregate, with an increase of 4.1 percent.

On a worldwide basis, IBM gained five points of market share in the Unix server business, which accounted for $4.09 billion in sales. IBM's Unix sales were up 18.9 percent, to $934 million, but it only holds 22.8 percent share of the Unix pie. Sun, with $1.46 billion in Unix sales, is still the market leader, with 35.6 percent of the pie, but Sun lost 6.6 points of share. HP, even with difficulties in its core Unix midrange business, was able to gain share in Unix, according to Gartner, even as the Unix business was down 7.1 percent. HP had $1.29 billion in Unix server sales. Other vendors in the Unix market accounted for only $409 million in sales, or 10 percent of the market.

In the Intel-based server market, HP lost 2.9 points of share but was still the clear leader, with $1.42 billion in sales and 31.6 percent of this market, which accounted for $4.5 billion in sales worldwide. Dell was the number-two vendor in the Intel space, with $944 million in sales and 21 percent of the market, a feat made possible by Dell increasing sales by 22 percent. IBM increased its Intel-based server sales by 23.7 percent, according to Gartner, giving it $776 million in sales, 17.2 percent of the market, and 1.1 points of gained market share.

In the U.S. market, IBM brought in $1.27 billion in sales compared with HP's $1.09 billion, giving them 30.1 percent and 25.6 percent market share respectively. IBM grew server sales by 15.7 percent in the quarter, and HP grew them by 14.3 percent, which demonstrates that whatever HP is doing wrong, it is doing it wrong outside of the United States.

The overall U.S. server market grew by 4.6 percent, to $4.2 billion. Anytime a vendor beats the overall market in growth by a factor of three or more in a tight economic climate--as both IBM, HP, and Dell did in the second quarter--you have to ask yourself what is happening.

One thing is that Sun's server sales, according to Gartner, were off 32.3 percent in the quarter, to $640 million. A drop as precipitous as the one Sun experienced in the quarter in the United States can't be attributed solely to changes in the product mix. Sun lost 8.2 points of market share in the overall market, and in the Unix submarket it lost 14.6 percent share. This is a dramatic change--shocking even.

Dell's sales in the United States in the second quarter of 2003 were up 18.6 percent, to $555 million, says Gartner, giving it 13.1 percent of the market. All the other vendors in the U.S. market collectively grew their sales by 16.2 percent, according to Gartner, giving them $680 million in sales and 16 percent of the market.

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© 2003 Unisys Corporation and Microsoft Corporation. Unisys is a registered trademark of Unisys Corporation. Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners. (1) Unisys primary market research 1Q03.