Servers take center stage in the second of NETWORK COMPUTING 's four-part series on the changes transforming the data center. Server sales came back with a bang last year, rising 15.3 percent in the fourth quarter, the highest growth rate in three years and capping the fourth consecutive quarter of year-over-year growth.
According to IDC, 2.1 million units generated $15 billion in sales revenue, with IBM in the top spot with $5.6 billion in revenue, up 21.9 percent; HP second with $4.5 billion, up 13.2 percent; Dell third with $1.19 billion, up 26.8 percent; Oracle/Sun fourth with $883 million, down 14.4 percent; and Fujitsu fifth with $541 million, down 9.4 percent. Gartner's numbers were similar, although it put HP in first place, with 32.2 percent share of shipments, followed by Dell's 21.6 percent, IBM's 14 percent, Fujitsu's 3.2 percent and Oracle's/Sun's 1.5 percent.
Looking ahead, IDC is predicting more modest growth of 5.1 percent in 2011, primarily propelled by greater adoption of cloud computing, increased use of mobile computing platforms and explosive growth in the amount of data being generated. Servers based on the x86 architecture will continue to dominate the market at 65 percent of revenue in 2011, although mainframe and Unix-based servers showed renewed strength with a forecast of 2.5 percent growth this year after many years of decline. But new servers running more energy-efficient ARM and Intel Atom processors could cause some market disruption, says IDC.
While Cisco doesn't show up in either the shipment or sales figures, it effectively declared war on data center server vendors in March 2009 when it announced its Unified Computing System strategy. Two years later and the top three server vendors--IBM ($5.6 billion), HP ($4.5 billion) and Dell ($1.6 billion)--hold 79 percent of the market. If you include Oracle and Fujitsu, everybody else, including Cisco, holds less than 12 percent of the market.
Dick Csaplar, senior research analyst, storage and virtualization, at the Aberdeen Group says that since Cisco entered the server market when it started shipping product in the summer of 2009, it claims to have exceeded Dell in the number of blade servers shipped in North America (to take over the No. 3 position). Csaplar calls this "a major accomplishment, given they have only been in the market for 18 months. But the real measure of success is how the servers leverage the sale of fabric interconnects and their UCS management software. They need the servers to offer a full solution to customers who want a single vendor solution and easy management."