Dell sold 33 percent of the Windows NT workstations that shipped in the United States in the second quarter of this year. HP followed with a share of 25 percent, according to figures from Dataquest. The numbers reflect a reversal of fortune from the second quarter of 1998, when HP had 49 percent of the market and Dell only 18 percent.
Compaq and IBM fill the next spots in the rankings, with shares of 18 percent and 17 percent in the United States, respectively.
Globally, HP is still the leader, but not by much. It has 26 percent of the market share to Dell's 24 percent. And Dell earns more money both in the United States and worldwide.
The reasons for the flip-flop, analysts say, include HP's aging graphics system and Dell's efficient operations. Dell first passed HP in the U.S. market in the first quarter of 1999, said Dataquest analyst Kimball Brown.
Workstations are high-performance computers used for intensive tasks such as creating digital movies, designing machinery, or modeling economic systems. Though "Wintel" systems using the Microsoft Windows operating system and Intel chips are gaining in popularity, there will always be a place for high-end systems that don't have mainstream hardware designs, analysts say.
When it comes to proprietary hardware, HP has a far more distinguished product line than Dell. HP just introduced its new J7000 model that can use as many as four of HP's PA-RISC chips and address as much as 8 gigabytes of random-access memory--a new level of computing power for an architecture HP released in May.
Dell lacks the more expensive, powerful, and profitable Unix workstations sold by IBM, Compaq, and HP. But that can be an advantage, said Aberdeen Group's Shawn Willett. "Right now, it's a great advantage for them because they don't have to deal with positioning issues," such as trying to decide when to promote a certain model, he said.
Being confined to the Wintel landscape, though, does make it harder to come up with products that are different from the competitors' models, Brown said. "You can't really innovate in PCs," which are based on standard designs.
Instead, companies such as Dell get ahead by being more efficient at building and selling the boxes, Brown said. "It's all logistics."
Willett also attributes some of Dell's gain over HP to its superior graphics performance. HP continues to rely on its own Visualize FX graphics cards, a two-year-old design in a market that has moved ahead much faster.
Creating more lavish hardware is easier with Unix workstations, which helps to increase profits. SGI, IBM, HP, and Sun Microsystems all sell Unix workstations costing $40,000 and up, said Jon Peddie, president of Jon Peddie Associates, a consulting group in Tiburon, California. And Dataquest shows that Unix workstation revenues for the second quarter of 1999 were $1.55 billion, compared with $981 million for Windows NT workstations.
Market share numbers should be taken with a grain of salt, however, Peddie cautioned. Many companies' workstations are just the same as high-end PCs. He considers a workstation to be a machine with lots of memory, a huge screen, a fast hard disk, a top-of-the-line CPU and graphics card, and the ability to use more than one CPU.
One machine that fits the bill is SGI's ill-fated Visual Workstation. It combined Intel CPUs and Windows NT with the unique designs more typical of the Unix workstation space where SGI has been a leader.
One big question for the future is what will become of SGI machines. The Visual Workstations were highly regarded but plagued by design and manufacturing woes. After more than two years developing the workstations, SGI said it will divest itself of the product line and hand manufacturing and sales over to another, still undisclosed company.
Another question coming is what will come of the Rambus high-speed memory technology. Workstations, which often have to transfer large amounts of data from memory to the CPU, need a high-bandwidth system. Intel had anointed Rambus's method for the job. However, technical difficulties have delayed the Intel chips needed to use Rambus--even after HP had announced new systems that included the latest memory technology.
Dell also is a major believer in Rambus, and has said it still backs the technology.