Dell's 24.8 percent growth to $1.17 billion in server sales contrasted sharply with Sun's 12.5 percent decline to $1.22 billion, according to market researcher Gartner. Although Sun, a company that designs much of its own gear, disparages Dell's distribution-focused approach, which relies heavily on technology from Intel and Microsoft, customers are voting with their wallets: In the United States during the first quarter,.
Dell and Sun together, however, sold less than No. 2 Hewlett-Packard, which saw server sales grow 6.2 percent to $3.07 billion, Gartner said. After HP's acquisition of Compaq Computer, it challenged IBM for the top spot on the list, but now IBM has pulled ahead, with 16.7 percent growth to $3.63 billion.
Although HP grew in absolute terms, it didn't keep up with the overall server market, which increased 9.3 percent to $11.81 billion.
The market "had a blowout quarter in the fourth quarter of 2003, but we didn't think we could sustain that growth curve up. We were right. But we still see signs of growth and recovery," said Gartner analyst Mike McLaughlin.
The server market paid dearly for the excessive purchasing of the dot-com days, shrinking for three years afterward and returning to growth only in recent months.
Linux growth spurt
One area that blossomed in particular was sales of Linux servers, which grew 57.3 percent to $1.02 billion, McLaughlin said. By comparison, sales of servers running Windows increased 19.5 percent to $4.13 billion in the quarter, he said, and the 35.1 percent share of the market enjoyed by such servers gives them the largest piece of the server revenue pie.
IBM was the top Linux seller, with 28 percent share, followed by HP with 26.9 percent, Dell with 17.8 percent, Silicon Graphics Inc. with 3.1 percent, Fujitsu with 2.8 percent, NEC with 1.9 percent and Sun with 0.9 percent.
Another bright spot was, which increased 12 percent to $1.7 billion, Gartner said. Almost all companies except IBM gave up on the market, but Big Blue continues to try to .
Also growing were servers using Intel processors, in particular machines costing less than $5,000, Gartner said.
For servers with 32-bit "x86" chips such as Intel's Xeon, HP was No. 1 with 32.5 percent share, followed by Dell with 21.7 percent, IBM with 15.8 percent and Fujitsu with 5.1 percent.
Sun, which stopped shunning the x86 server market only in the last two years, "is not doing so well" so far, McLaughlin said. It didn't crack the top 10 in terms of revenue, though it did make 10th place, as measured by unit shipments. But its sales of 4,471 32-bit x86 systems in the quarter were far behind top-ranked HP, with 412,000 32-bit x86 server shipments.
The Unix market, once dominated by Sun, leveled out, as it shrank 2 percent to $4.02 billion. In the first quarter, Sun kept its No. 1 rank with $1.21 billion in sales, but revenue dropped 13 percent. HP shrank 4 percent to $1.19 billion while IBM climbed 16 percent to $1.1 billion, Gartner said.