Dataquest: Server shipments up 4 percent in 2002

Worldwide server shipments are picking up steam, but the heady days of double-digit percentage growth won't return anytime soon, according to market research firm Dataquest Inc., a unit of Gartner Inc. Server shipments grew 4.2 percent in 2002 over 2001, as Hewlett-Packard Co. (HP) maintained a healthy lead over its closest competitor, Dell Computer Corp., Dataquest said last Friday in a release.

The data suggests that while server shipments are stabilizing, there are no signs of the dramatic growth that marked the late 1990s as the worldwide economy continues to limp along, Dataquest said.

The acquisition of Compaq Computer Corp. allowed HP to vault into the lead for worldwide server shipments. The combined company shipped 1.39 million servers in 2002, good for 30.1 percent of the worldwide market. Dell's 851,227 shipments represented 18.5 percent of the market.

Dell posted the largest year-over-year increase, growing shipments 19.3 percent from 2001. The combined HP/Compaq actually lost ground, as combined shipments slipped 4.6 percent. Compaq led the world in server shipments in 2001 with 1.03 million units, while HP only shipped 428,104 units that year, according to Dataquest.

IBM Corp.'s servers lost a little ground in 2002, as shipments dropped 1.3 percent to 657,895 units. Sun Microsystems Inc. gained ground, increasing shipments 6.7 percent to 277,300 units.

One of the strongest performing segments was the white-box server category. The term "white box" refers to servers made by small, local vendors that don't garner significant market share themselves, but when lumped together accounted for 29 percent of all servers shipped in 2002, second only to HP.

The numbers take into account servers built using processors from Intel Corp., and RISC (reduced instruction set computing) processors such as Sun's Sparc or IBM's Power4. RISC servers generate more revenue for vendors than Intel-based systems, but about 87 percent of all servers in the market today are based on Intel chips, Dataquest said in November. At that time, the San Jose, California, company predicted that revenue from Intel servers will exceed revenue from RISC servers for the first time in 2003.

Overall server shipments to the U.S. grew 13.8 percent, but revenue growth did not follow suit, Dataquest said. This means the shipment growth is taking place among less-expensive systems, and the market is still stagnant, the company said.

Europe, the Middle East and Africa saw an increase in server demand in December, but it wasn't enough to make up for a difficult year, Dataquest said. Revenue is expected to decline in that region, which is also true for Latin America, the company said. Asia-Pacific shipments are growing, but the outlook for 2003 is still uncertain, according to Dataquest.

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