Sun outshines its rivals in servers

Giant posts positive growth for Q206 as rest of the big four players flounder

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By  Published  September 8, 2006

Sun Microsystems looks to have finally turned the corner in its battle to regain ground on its rivals in the server market with significant revenue growth during the second quarter, according to market research firm IDC.

After years of losing share to the like of IBM, HP and Dell, Sun — the number three vendor — was the only one of the four big players in the sector to post positive worldwide growth in Q206.

IDC put its growth at 15.5% with total revenues of US$1.58million and market share gains of 1.7% to give it 11.2% of the total server market. IDC said overall growth in the market was just 0.6%.

“Sun continued its strong server revenue performance in consecutive quarters and rega- ined the number three overall market share position,” said Steve Josselyn, research director of enterprise server research at IDC.

“The clear majority of Sun’s server revenue is generated from UltraSPARC-based systems, but the growth in the company’s Opteron-based products are having a positive impact,” he added.

Despite the impressive growth, Sun’s Q2 revenue was still dwarfed by that of its larger rivals HP and IBM.

Big Blue continued to be the clear market leader with the research firm’s figures showing revenues of US$3.8 billion, despite a dip in incomeof 2.2% compared to Q205 — the biggest drop of any of the top vendors.

HP’s revenue also dropped slightly, but comfortably held onto its position as the number two vendor in the server market with total revenues for the quarter of US$3.4 billion.

Dell continued to languish in fourth spot with revenues of under US$1.3 billion. The vendor has a lot to do to win back customers if the results of a recent survey by Gabriel Consulting Group (GCG) are anything to go by. The world’s biggest computer maker came last in a GCG survey of enterprise customers asking which server vendor they preferred.

Overall growth in the server market was driven by the x86 segment, according to IDC. It said IBM, HP and Sunall posted positive year-on-year revenue growth in the x86 market as customers continued to consolidate their IT infrastructure.

“The x86 server segment continues to be the growth engine for the overall server market as customers increasingly migrate workloads to industry-standard infrastructures,” said Jed Scaramella,enterprise server research analyst at IDC.

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