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IBM grows in shrinking server market

The first glimpse of 2001 server sales shows IBM gaining over its competitors, increasing its revenue despite a U.S. market that plunged 23 percent.

Stephen Shankland Former Principal Writer
Stephen Shankland worked at CNET from 1998 to 2024 and wrote about processors, digital photography, AI, quantum computing, computer science, materials science, supercomputers, drones, browsers, 3D printing, USB, and new computing technology in general. He has a soft spot in his heart for standards groups and I/O interfaces. His first big scoop was about radioactive cat poop.
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  • Shankland covered the tech industry for more than 25 years and was a science writer for five years before that. He has deep expertise in microprocessors, digital photography, computer hardware and software, internet standards, web technology, and more.
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Stephen Shankland
2 min read
The first glimpse of 2001 server sales shows IBM gaining over its competitors, increasing its revenue despite a U.S. market that plunged 23 percent.

According to Gartner Dataquest figures for the United States, IBM revenue increased 7.8 percent from $4.7 billion to $4.9 billion. Big Blue regained the No. 1 spot it lost to Sun Microsystems for 2000 sales, increasing market share from 21.5 percent in 2000 to 29.3 percent in 2001 while Sun waned from 22 percent to 21.4 percent.

Rivals Hewlett-Packard, Compaq Computer and Dell Computer also lost share and saw diminishing revenue.

Server companies had been accustomed to heavy demand and high profits from Internet and more mainstream companies, but the Internet implosion and economic turmoil led to lower shipments and intense pricing pressure.

The overall U.S. server market shrank 23 percent from $21.8 billion to $16.7 billion, Gartner said.

The Unix server market--the sweet spot with comparatively high price tags and high product shipment volumes--also shrank dramatically, dropping 25 percent from $10.3 billion to $7.7 billion.

Sun maintained a strong first place in Unix while losing some share to IBM. Sun's Unix server revenue dropped from $4.8 billion in 2000 to $3.6 billion in 2001, while its market share increased a mere smidgen from 46.3 percent to 46.4 percent.

IBM solidified its second-place rank with $1.3 billion in Unix server sales--an increase of 3.1 percent to 20.9 percent of the market. HP, in third place, dropped 0.5 percent to 16.6 percent.

The Intel server market dropped 27.6 percent from $9.3 billion to $6.7 billion, Gartner said.

Compaq and Dell were neck-in-neck, with 26.4 percent and 26.2 percent of the Intel server market, respectively. But Dell gained at Compaq's expense, growing 0.7 percent while Compaq dropped 2.16 percent.

Meanwhile, IBM posted the largest gain, 1.6 percent to a third-place 12.4 percent.