Dataquest: Server revenue down 15 percent in Q1

Worldwide revenue from sales of server hardware dropped 15.2 percent in the first quarter of 2002 compared with the same quarter a year earlier, and fell 13 percent compared to the fourth quarter of 2001, according to research figures released Tuesday by Dataquest, a unit of research company Gartner Inc.

Figures Dataquest released last month showed that unit shipments of servers were flat in the first quarter compared to the same quarter of 2001, pointing to a price decline for server hardware. IBM Corp. held on to its crown for server revenue market share, accounting for 27.8 percent of worldwide sales in the first quarter of 2002. The Armonk, New York, company gained share from the first quarter of 2001, when it held 25.8 percent of the market, according to Shahin Naftchi, senior analyst for servers at Dataquest.

Sun Microsystems Inc. trailed IBM in the first quarter of 2002 with 17.4 percent of the market, while Hewlett-Packard Co. and Compaq Computer Corp. held 12.8 percent and 12.9 percent, respectively. HP's acquisition of Compaq was not completed until the second quarter.

Although each of these companies reported a decline in revenue year over year, IBM saw the smallest drop, with server revenue falling 8.7 percent from the first quarter of 2001. The other three top vendors saw declines in the double digits, the research company said.

Compaq maintained its number one position in the market for servers based on Intel Corp. processors, with 25.2 percent of the market, Dataquest reported.

HP had a stunning 202.8 percent gain in revenue from the sale of Linux-based servers in the first quarter of 2002 compared to the same quarter last year. However, its 4.7 percent market share in Linux servers by revenue was the smallest among the top four vendors, and HP actually lost 2.5 percentage points of share from the first quarter of 2001.

Meanwhile, IBM rose to become the number one seller of Linux servers based on revenue, with 31.5 percent of the market. The company outpaced Dell, which held the number one seat in the first quarter of 2001. IBM's market grab was mainly due to the company's inclusion of Linux in its big-ticket products, Naftchi said.

"IBM is putting Linux on the mainframe, so in terms of revenue it is high," she said.

Based on the number of Linux server units shipped, Compaq had the lead in the first quarter of 2002 with 23.8 percent of the market, Naftchi said.

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