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Rivals closing in on server champ HP

Hewlett-Packard is hanging on as worldwide leader in server shipments, says a new study--but the gap between the company and its competitors is shrinking.

Hewlett-Packard remains the worldwide server No. 1, but competitors are steadily gnawing away at the company's lead, according to a study released Monday.

HP sent out 30 percent of servers shipped worldwide in the third quarter, according to preliminary figures from research company Gartner Dataquest. This places the company well ahead of its closest server competitor, Dell Computer, which held 19.2 percent of the market.

However, Dell's market share is growing while HP's continues to contract. Dell's server shipments grew by 18.1 percent compared with shipments in the same quarter last year. By contrast, HP's shipments compared year-on-year shrank by 4.8 percent. The company vaulted to the front of the server market through its acquisition of Compaq Computer, but uncertainty about the true benefits of the merger linger.

"The real results of the HP purchase of Compaq, when it comes to server sales, probably will not manifest themselves until early next year," said Jeff Hewlett, a Gartner analyst, in a prepared statement.

IBM, the third largest server maker worldwide, held 13.9 percent of the market, a 1.3 decline from last year's tally. In fourth place was Sun Microsystems with 6.2 percent of the market. Sun saw shipments grow 17.5 percent in comparison with the third quarter of 2001, when the company was experiencing a nosedive in business.

Overall, the server market grew by 3.1 percent in the third quarter compared with the same period a year ago. But Gartner analysts cautioned against reading a rebound into rise, as third-quarter sales in 2001 were unnaturally depressed by the Sept. 11 terrorist attacks.

Last week, a survey of 100 chief information officers conducted by research firm Merrill Lynch said that information technology spending might begin to pick up, but not until the middle of next year.

In the United States, Dell remains the top server manufacturer, with a 26.3 percent market share. HP was second in the third quarter, taking hold of 25.9 percent of the market. Dell, however, saw shipments grow by 26.7 percent, while HP's shipments shrunk by 0.5 percent.

Dell sells servers powered by Intel chips only, whereas HP sells both Intel servers and Unix systems running its PA-RISC processors. While these Unix/RISC systems account for fewer server shipments in terms of units, they are often far more profitable.