Dell overtakes HP in U.S. workstation market
Dell Computer moves a step ahead in the Intel-based workstation race, taking first place from rival Hewlett-Packard in both shipments and revenues in the United States.
- 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.
In the first quarter of 1999, Dell topped HP in both leading categories, according to figures to be released tomorrow by market research firm Dataquest. Dell shipped 28,323 units to HP's 24,159, bringing in $134 million in revenue to HP's $88 million.
The victory isn't complete, however. HP still is ahead in global shipments of high-end desktops built around Intel microprocessors and the Windows NT operating system, and Dell still has to contend with workstations based on the Unix operating system, according to Dataquest analyst Kimball Brown. The latter task is a bigger challenge, he said.
The workstation market is dwarfed by that of regular PCs, accounting for only a few percentage points of overall PC shipments. But workstations are used for computing tasks requiring a lot of muscle, so the products tend to come with high-end equipment and, consequently, comfortable profit margins. For PC makers looking at the decreasing margins of the PC business, workstation gains would be welcome news.
Intel-based workstations ship in larger numbers than Unix machines, according to another research firm, International Data Corporation. But Unix workstations, typically still fancier and more profitable, have been pulling in more revenue.
Later this year or early in 2000, however, revenues from Intel workstation sales will overtake that of Unix machines, IDC said in June.
Intel machines are never going to replace Unix machines completely, though they have made inroads, Brown said. For one thing, they have a long way to go before they can catch up to the 64-bit chips that power most Unix machines, he said. "They have to get to 64-bit before they take over," he said.
Jon Peddie, an analyst at Jon Peddie Associates in Tiburon, California, said Unix is still most popular in large corporation such as aerospace or automotive companies that have a large investment in Unix workstations, along with accompanying software and training systems.
Powerful engineering software such as Dassault Systemes' Catia is being translated to Windows NT, though, and NT machines are being used to animate the digital mouse that's the lead character in the upcoming film Stuart Little.
Rambus en route
Meanwhile, the workstation market, full of customers more willing to pay for high performance, is where the new Rambus memory system will debut this fall. Dell in particular is expected to snap up much of the supply of Rambus chips, analysts have said.
Rambus "lifts the top off the scalability of the Intel machines," Peddie said. "The communications between the processor and memory were so deeply crippled, no matter how much faster [the processor], nothing ran faster."
Rambus will enable a new generation of software that can take advantage of the speed, he added.
In 1998, Sun Microsystems won the battle for revenue in the workstation market, but HP was close behind, IDC said. Sun's workstations are popular in the financial community, analysts say.
Dell plans to boast of its victory tomorrow, announcing price cuts of as much as 17 percent in some models. The price cuts came at the same time as the arrival of new 600-MHz processors from Intel in the Dell machines. (See related story)
Warning that market share struggles can be "a numbers game"--companies can fudge workstation shipment numbers depending on how they classify the computers they sell--Peddie said Dell's rise to contend with the big-name companies such as Compaq, HP, and IBM is noteworthy. It will be more significant if Dell manages to take the lead for a year, he added..