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Dell, HP gain on IBM in server market

Big Blue holds onto its top spot in market share, but its revenue growth is outpaced by Dell and Hewlett-Packard.

Hewlett-Packard and Dell gained in the server market at the expense of IBM and Sun Microsystems, while overall growth slowed in the first quarter of 2005, new figures show.

The overall market grew 4.1 percent to $12.3 billion worldwide compared with the year-earlier quarter, a rate that was slower than that of each quarter since the second of 2003, according to figures Gartner released Wednesday. Servers are powerful systems used for networked computing tasks such as file storage, e-mail routing and bank account transactions.

IBM kept its place at the top of the heap, with 29.8 percent of the market. But its revenue growth of 1.1 percent was outpaced by No. 2 HP, at 13.1 percent growth and 28.1 percent of the market, and Dell, with 13 percent revenue growth and 10.8 percent of the market.

Sun, which held third place a year earlier, saw server revenue drop 4.2 percent and its market share dip to 9.5 percent, Gartner said.

IBM made gains in the $4.1 billion Unix server market, however, with revenue growth of 12 percent that carried it into the first-place spot, with 30.3 percent share, compared with a third-place finish a year earlier. HP kept the No. 2 spot in Unix, with a revenue decline of 0.7 percent and 28.7 percent share, while former No. 1 Sun slipped to third with a revenue decline of 6.6 percent and 27.8 percent share.

For servers using x86 processors such as Intel's Xeon and Advanced Micro Devices' Opteron, HP kept its top spot. HP, No. 2 Dell and No. 3 IBM all increased revenue faster than the market's 9.4 percent growth to $6 billion, Gartner said. Sun, which has begun aggressively selling Opteron servers, rose to seventh place with 1 percent of the market.

The market for blade servers more than doubled to $426 million in the first quarter. Blade servers are thin models that slide into a chassis that provides shared power and networking infrastructure. IBM extended its lead in that market with 170 percent growth and 36.3 percent share. No. 2 HP, No. 3 Sun and No. 4 Dell all lost share in the market.