Gartner: Server Shipments Grew 24 Percent in the Quarter

Gartner Says Worldwide Server Revenue Increased 8 Percent in Second Quarter of 2004

HostReview.com
Friday, August 27, 2004; 12:00 AM

STAMFORD, Conn., August 27, 2004 — Worldwide server revenue surpassed $11.5 billion in the second quarter of 2004, a 7.7 percent increase from the second quarter of 2003, according to Gartner, Inc.

"Overall, each region showed positive year-over-year growth in terms of revenue," said Mike McLaughlin, principal analyst for Gartner. "We also saw increased activity in the x86-64 market, as well as continued strong sales in the low-end server market."

IBM held its lead based on server revenue, as its market share increased to 30.7 percent in the second quarter of 2004 (see Table 1). Consistent with sales in the first quarter of 2004, Dell experienced the strongest growth rate among top-tier vendors. Its revenue increased 20.1 percent from the second quarter of 2003.
 
Worldwide server shipments in the second quarter of 2004 surpassed 1.6 million units, a 24.5 percent increase from the same period last year (see Table 2). Hewlett-Packard led all vendors with 463,489 units shipped in the second quarter.

While Dell has reported the strongest growth rate among the top-tier vendors for several quarters, Sun Microsystems exhibited the highest growth rate overall in the second quarter, with shipments increasing 38.4 percent from the same period last year. Sun benefited from an increase in demand from the telecom sector for its Netra product line, as well as increased sales of high-end servers to the financial sector.

In server operating systems (OS), Linux continued to show strong double-digit growth in both revenue and shipments. Linux revenue grew 54.6 percent in the second quarter, and its unit shipments increased 61.6 percent. Linux represented 9.5 percent of the overall server OS revenue.

Microsoft Windows accounted for 34.4 percent of worldwide OS revenues. Unix continued its slow decline, as its revenue decreased 4.3 percent in the second quarter, and it lost more than 4 points of market share.

While Intel's Itanium still grew at strong rates, the industry saw the emergence of the x86-64 CPU space, which had a year-over-year growth rate of 2,183 percent. The largest segment is still the x86-32 CPU server market, which grew a healthy 10 percent year-over-year to revenues of more than $5.1 billion in the second quarter of 2004.

About Gartner:
Gartner, Inc. (NYSE: IT and ITB) is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 10,000 clients, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company's businesses consist of Gartner Intelligence, research and events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customized engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has more than 3,500 associates, including approximately 1,000 research analysts and consultants, in more than 75 locations worldwide. For more information, visit www.gartner.com.