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Server leaders wrestle for Unix crown

Hewlett-Packard and IBM tie for first place in the hotly contested Unix server market, pushing aside Unix heavyweight Sun, a study says.

Hewlett-Packard and IBM tied for first place in the hotly contested Unix server market in the fourth quarter of 2002, pushing aside Unix heavyweight Sun Microsystems, according to a new study released Friday.

HP and IBM each had a market share of 30 percent, or $1.5 billion in revenue, of the $5 billion worldwide Unix server market in the fourth quarter, research company IDC said. Unix specialist Sun had a market share of 28 percent, with $1.4 billion. Sun, though, remained the top Unix server seller for the entire year, with $6 billion of the $18.7 billion total market, IDC said.

Servers are powerful machines that run around-the-clock, handling data storage and processing tasks such as tracking bank accounts, stock trades or product inventory. Servers running Unix, popular with customers because of their balance of price and capability, account for the largest segment of the server market. While Sun has long led the market, with HP in second place, IBM is amid a years-long effort to fight back.

The fourth-quarter figures disagree somewhat with statistics released earlier this month by Gartner, which said Sun and HP had tied for first place in the Unix market. Both studies, however, paint the same broad picture: Sun remains top for the overall year, but IBM is gaining ground.

Sun said it believes that the Gartner figures are more accurate, and the company blamed its third-place position in the IDC rankings as the result of seasonal differences in sales.

IDC server analyst Vernon Turner said companies historically have done better in the final quarter of their fiscal years, which for IBM is the last quarter of the calendar year and for Sun is the second.

Regular seasonal patterns are re-emerging, though, after two years of the server market being punished by oversupply, the economic recession, intense competition and heavy discounting. "We're not out of the woods yet, but we're starting to see traditional seasonality return," Turner said.

In the overall market, IBM led the pack, followed by HP and Sun. Dell Computer, in the fourth slot, managed to snatch some market share away from the leaders.

IBM extended its lead in the market during the fourth quarter, according to the survey, grabbing 36.2 percent of the market on $4.2 billion in revenue, a jump of more than 2 percentage points over the year-ago quarter.

The report said fourth-quarter server revenue grew by 15.2 percent over the third quarter, boosted by strong growth in the entry-level market for servers costing $100,000 or less.

Although fourth-quarter sales fell 5.2 percent, to $12.3 billion, from the same quarter a year ago, IDC analyst Jean Bozman said the strong sequential growth is a sign the market may be stabilizing.

For the year overall, IBM increased its lead slightly, accounting for 29.4 percent of the market in 2002, compared with 28.4 percent in 2001. However, its revenue dropped 8.5 percent to $13 billion in 2002 from $14.2 billion in 2001.

IDC called the Linux market the "brightest spot" in the fourth quarter. Linux server revenue jumped a whopping 41 percent to $607 million over the year-ago quarter.

In the Linux market, IDC gave HP the top-ranked spot and said IBM and Dell were tied for second place. Gartner, by contrast, put IBM on top. One possible difference is in how IDC counts revenue for Linux on IBM's mainframes.