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IBM claims win in bruising server battle

Big Blue rings up more Unix server revenue than any company in the fourth quarter. It's an important milestone for IBM, as it's been working to reinvigorate its Unix server business.

IBM chalked up a hard-won victory in the fourth quarter of last year, capturing more revenue than any company in the worldwide market for Unix servers.

Big Blue used its big iron to gain the No. 1 spot in Unix server revenue for the quarter, with a 26.9 percent revenue market share, according to IDC.

IBM edged out Sun Microsystems, which had a revenue market share of 26.8 percent, by about $9 million. Hewlett-Packard ended the quarter in the third spot, with a 25 percent share, according to IDC.

Gaining the top spot in the quarter was an important milestone for IBM, which has been working to reinvigorate its Unix server business. It last held the top spot in Unix in the fourth quarter of 1998, IDC said.

Servers are the powerful computers that handle chores on corporate networks such as keeping track of all the sales of airplane tickets. The systems are expensive, with top-end models often costing well over $1 million. Purchases of servers tend to tow along sales of a company's other products and services.

Although IBM may have won the battle, Sun won the Unix server war in 2001. Sun held the No. 1 position for the year with $6.9 billion in revenue and a market share of nearly 31 percent, followed by HP with $5.6 billion in sales and 25.3 percent of the market. IBM placed third with just over $5 billion in revenue and 22.5 percent of the market, according to IDC.

"It's a very competitive space. Sun, HP and IBM are battling it out...and those top three spots may fluctuate over the next three quarters depending on the economic conditions in any particular region" of the world, said Steve Josselyn, research director of IDC's Enterprise Server Fundamentals program.

An IBM representative said the company benefited from sales of its new high-end p690 "Regatta" server. IBM started shipping that machine in December.

"It was just the fourth quarter that IBM was able to...edge (Sun) out," Josselyn said. "IBM didn't shrink as much as everybody else" during the quarter.

Competition among companies was just as intense in the overall server market in the fourth quarter. Overall, IBM held its spot as the top server maker by revenue with a 32 percent share, followed by Compaq Computer with 17 percent, HP with 14 percent and Sun with 12 percent.

Server revenue also looked up a bit in the fourth quarter. After a 30 percent decline in the third quarter, server revenue fell by 26 percent compared with the fourth quarter of 2000, or from $16.9 billion to $12.6 billion.

For all of 2001, server revenue fell by 19 percent to $49.8 billion. IBM had a 28 percent share of revenue, followed by Compaq with 16 percent, HP with 14.4 percent and Sun with 13.8 percent, according to IDC.

Meanwhile, Gartner said last month that IBM cemented its first-place spot in the worldwide market, increasing its share from 25 percent to 29 percent.