HP Ships 10 Millionth ProLiant Server, 1 Millionth Linux Box

by Timothy Prickett Morgan

While there has been a lot of talk about how Dell and its two-way and four-way servers are going to take over the IT world, every now and again the world needs to be reminded that Compaq--and now Hewlett-Packard thanks to the Compaq acquisition--is the undisputed king of X86 server shipments. This only stands to reason since Compaq was the originator of the PC server with its SystemPro line in 1989.

Last week, as HP rolled out support for new Opteron processors in its ProLiant family of rack and blade servers, the company celebrated the 10 millionth shipment of its ProLiant servers, with the ProLiants being the kickers to the SystemPros and the ProSignias, the low-cost X86 servers that Compaq introduced in 1992. The first ProLiant, which was the original name for the rack-mountable versions of Compaq's servers, was introduced in June 1994, and over time the ProLiant brand name has been adopted for rack, tower, and blade servers. Shipping 10 million units is quite an accomplishment, and to put that into perspective, this is by far the largest installed base of servers in the history of computing, if you think of ProLiants as a single entity. Nothing comes even close. The largest minicomputer bases--the DEC VAX and MicroVAX and the IBM System/3X-AS/400-iSeries lines--probably accounted for about 1 million cumulative shipments over several decades. HP-Compaq did 10 million units in a little more than a decade. The 10 millionth unit that HP sold is actually a mix of ProLiant Opteron-based and Xeon-based blade servers acquired by long-time HP account Continental Airlines.

It took Compaq from 1989 to 1996 to ship its first million PC servers, according to Colin Lacey, director of platform marketing for HP's Industry Standard Servers unit. The 10 million shipment milestone, doesn't count the early SystemPro and ProSignia sales, but the true servers with server features sold since 1993. The cumulative sales numbers--which are not to be confused with installed base, which is a much smaller number for all vendors, but particularly for vendors that have been selling server gear longer--is remarkable in that HP plus Compaq (mostly thanks to Compaq) have utterly dominated the X86 server industry that Compaq created. To date, based on numbers from IDC, Lacey says IBM has shipped just under 5 million of its PC-Netfinity-xSeries X86-based machines, while Dell has only sold 6.3 million units. Dell may have got a late start, but as the chart below shows, it has grown like crazy, and IBM has done a pretty good job shipping X86 servers, too. But by buying Compaq, HP also bought itself a server shipment engine that is keeping pace.

Right now, says Lacey, HP ships 1 million server units in about seven months, and the pace of growth in shipments is still accelerating, although it is flattening for HP, Dell, and IBM, as the chart above shows. The question that this chart raises is whether or not 2004 will be an inflection point in the shipment curve where shipment growth will decline. This is always a possibility, particularly given the trends of server consolidation, virtualization, and multi-core processors, which will make servers and their applications more efficient and, in theory, allow companies to get by on fewer servers, particularly as each server will have a lot more oomph. Extrapolating on a straight line from current shipment rates, the math suggests that HP would sell another 10 million ProLiants in about five years and nine months; Lacey says that internal projections by HP are that it will sell the next 10 million units before the end of 2009, which is four years and six months away. That suggests to me that HP doesn't believe that inflection point in 2004 that is clearly visible among all vendors' cumulative shipments is going to set the new growth rate.

Also last week, HP announced that it has shipped its 1 millionth Linux-based server since entering the Linux server racket in 1998. HP reckons that it has shipped 45 percent more Linux boxes than its nearest competitor. HP said that it has had the lead in Linux server shipments (if you add in Compaq, of course) for 29 consecutive quarters. Further touting its Linux horn, HP said that it shipped ten times as many Linux servers as Sun, had 8 points more market share in Linux server revenue than IBM, and outshipped and outsold Dell in the Linux server market as well in the first quarter of 2005.

Can HP maintain its lead in shipments? Lacey thinks so. "We feel confident that we can maintain out lead," he says, explaining that while Dell has great market share amount single- and dual-processor tower servers used by small businesses, HP is the king of rack-mounted servers and is working back to the dominant position in blade servers, too. As for the impact that dual-core and future multicore processors will have on the entry server market, Lacey does not expect much of an impact. First of all, no tier-one server maker has created a single-socket, dual-core server--and HP has no plans to, either. So customers who might have acquired a two-socket machine are not expected to downshift to much less expensive one-socket boxes with dual-core chips. "The single-processor server market has remained pretty consistent at 20 percent of the overall X86 market, regardless of all the performance enhancements in the past many years, and I do not expect that to change," says Lacey. "Customers are looking to buy larger servers and running more virtual partitions on them, in fact." As for the idea of putting out a single-socket, dual-core Opteron box to go after Dell's market share at the low end of the server market, HP does not seem to be keen on the idea. Lacey says that SMB customers are too conservative to choose Opteron processors and prefer the Intel product. But, then again, maybe HP is, like Dell, being too conservative itself. I think a dual-core, low-power, Opteron 100 Series server with a small form factor and a low price is exactly what will excite SMB customers. More bang for the buck is always more exciting. I think it is just a question of education.

As for larger servers, HP is certainly very enthusiast about the Opteron processor, and last week rolled out support for the dual-core Opteron 200 Series in the rack-mounted DL385 servers (the fraternal twin of the Xeon-based ProLiant 380). The DL385, which has been shipping since last spring, already supports the single-core 2.4 GHz Opteron 250 and 2.6 GHz Opteron 252 processors, and now the dual-core 1.8 GHz Opteron 265, 2.0 GHz Opteron 270, and 2.2 GHz Opteron 275 chips are supported in the server. The updated DL385s also support SAS drives in addition to SCSI drives. The bare-bones DL145 G2 entry server, which has two sockets, now also supports the dual-core Opteron 200 Series processors, as do the BL25p (full height) and BL35p (half-height) blade servers. The DL145 G2 is aimed mostly at high performance supercomputing customers, but with an entry price of $1,219, it is going to see some demand among commercial customers, too. The BL25p and BL35p blade servers run all three speeds of the dual-core Opterons. HP has, like other Opteron vendors, been selling the dual-core Opteron 800 Series chips in its four-way servers (the BL45p blade and the DL585 rack-mounted server) for a few months.