HP’s share of server market slips


29 October 2002 Systems giant Hewlett-Packard’s share of the worldwide server market slipped in the third quarter of 2002, just months after the company completed its acquisition of rival Compaq, according to analysts Gartner Dataquest.

HP’s unit sales of servers fell 4.8% in the quarter to the end of September. Despite this, the company’s May acquisition of Compaq catapulted it into top position in the server market with a share of 30%. However HP’s slip raises questions about the wisdom of its acquisition.

Systems and services giant IBM’s market share also fell by 1.3% to 13.9% in the same period.

In sharp contrast, Dell registered strong unit sales growth of 18.1%. As a result, Dell increased its share of the global market to 19.2%, up from 16.8% in the same quarter a year ago. However, Dell’s strengths remain at the lower end of the market where margins are tight.

Systems specialist Sun Microsystems also increased market share from 5.4% to 6.2% in the latest quarter. In a bid to boost sales after a disastrous two years, Sun has been selling heavily discounted Unix-based servers. But the increase in market share has not been mirrored by a corresponding increase in revenues, although it has managed to arrest its precipitous decline in sales.

Meanwhile, Gartner Dataquest has warned that demand is unlikely to pick up soon. “The server market still looks cloudy with the possibility of war in the Middle East further aggravating economic uncertainty and continued constraints on IT spending, which make it hard to be optimistic about real recovery of the worldwide server market this year,” said Gartner analyst Shahin Naftchi.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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