Updates to this story
The fourth quarter of 2010 cemented a good year of worldwide server growth.
That's according to Gartner, which found that server shipments grew 6.5 percent year on year, and revenue boosted up by 16.4 percent.
The result of this growth, according to Jeffrey Hewitt, research vice president at Gartner, was as a result of "pent-up X86-based server demand," which "produced some significant growth on a worldwide level,"
He said that the introduction of new processors from Intel and AMD toward the end of 2010 also "helped fuel a pretty significant replacement cycle of servers that had been maintained in place during the economic downturn in 2009."
Blade server growth and the introduction of so-called 'skinless' servers in the X86 segment also helped push 2010 results into double-digit growth rates, despite constraints in RISC/Itanium Unix platforms.
The introduction of new mainframe platforms from IBM were also claimed to be instrumental in helping to drive increases in the mainframe segment with a 68.3 percent revenue growth of IBM's System Z platforms in the fourth quarter, Mr. Hewitt said.
Although Japan didn't see any growth, with a decline of 4.4 percent, its rival regions fared much better. North America bagged itself 24.5 percent of the market while Asia/Pacific gained 22.4 percent.
Latin America was able to hit 12.3 percent, while EMEA grew by 10.4 percent.
When it came to companies its no surprise that IBM was the leader of the worldwide server pack, ending the year with $5.2 billion in revenue for the fourth quarter of 2010 accounting for 35.5 percent of worldwide server revenue. This was up 2.8 percent, compared with the fourth quarter of 2009. Its growth was as a result of its System Z and System X product lines.
HP and Dell also joined the crew showing growth, while it wasn't so good for Oracle and which experienced revenue declines in the fourth quarter of 2010.
HP is also riding high on the server shipment wave coming up trumps and leading the way in the fourth quarter with a year-on-year shipment increase of 6.9 percent.
2010 marked a return to growth with increases of 16.8 percent in worldwide server shipments and 13.2 percent in revenue, the revenue was as a result of the industry replacing old X86 servers, and introducing cloud-related products.
When it came to the blade server market, the revenue here increased to 29.5 percent and a shipment increase of 12.6 percent for the year.
HP topped the 2010 leader board for blade shipments with a 47.3 percent share, followed by IBM with 25.4 percent share. However, Dell and Cisco also managed to muscle their way in with a small share increase.
And it's looking good for 2011, with Gartner claiming that the success will continue. However, the market won't be as on a high as 2010 as a result of the replacement cycle for x86 servers being reached in 2010. That said, these increases continue to be buffered by the use of x86 server virtualisation to consolidate physical machines as they are replaced.
There also seems to be a little bit of a fight going on between IBM and HP who are both vying for the ultimate leader spot. Both achieved revenues of over $15 billion for 2010, both with a market share of 31 percent. However, HP achieved a stronger year on year growth rate of 18.9 percent to IBM’s 9.2 percent.
It also showed it was doing well with the results of its x86 ProLiant line soaring, although IBM’s System Z line was key in its improved results in the fourth quarter.
“The fourth quarter rounded off an encouraging year for the server market in EMEA with each quarter seeing positive year to year growth rates for both shipments and revenues,” said Adrian O’Connell, research director at Gartner. “EMEA was particularly badly hit by the downturn in 2009 and, although economic concerns continue across much of the region, the server market has shown good momentum during 2010.”
However, there was one area that was weak over the year and that was the UNIX segment, which saw revenue decline 18.7 percent in the fourth quarter of 2010. This is because UNIX vendors are "squeezed between new investments in x86 platforms and the entrenched but strong installed base of System Z."
Mr. O’Connell added: “We also need to recognise that the market is still in a fairly tentative recovery mode. Many companies are still in cost-containment mode and, although 2010 growth levels were strong, we’re still some way off the revenue highs that we saw in 2007.”
Overall, RISC and Itanium Unix revenues also didn't fare well. Both declined 19.3 percent in the fourth quarter of 2010.
And although IBM led the segment in the fourth quarter of 2010, it only did so with a growth of 2.7 percent. This resulted in a share increase to 38.3 per cent. Second-ranked HP declined 15.3 percent and third-ranked Oracle declined 45.8 percent.
“These weak results are compounded by product transitions but are also indicative of the positioning difficulties that UNIX vendors are facing. The challenge remains for UNIX vendors to move upstream and fight for mainframe business, whilst also defending against Windows and Linux encroachments into their own installed bases,” concluded Mr O’Connell.