Server market refuses to budge in Q202

Constrained technology budgets and difficult economic conditions continue to have an adverse impact on the worldwide server market. During the second quarter of 2002, shipments of servers increased just 0.5% compared to the same quarter in 2001, according to the latest figures from analyst company Gartner Dataquest.

Shahin Naftchi, senior server analyst at Gartner, believes this sluggish growth is due to customer uncertainty over how the negative economic climate will affect their businesses. As a result, he says, they are wary of spending large portions of their IT budgets on high-end servers and of migrating off their existing hardware platforms.

The merger of Hewlett-Packard and Compaq in March 2002 has changed the dynamics of the market. The combined HP/Compaq server business controls more than 30% of the total market, snatching the market-leader spot from rival Dell. However, despite this impressive market share, HP/Compaq's combined shipments fell 9.2% compared with the same quarter in 2001. This situation could worsen, warns Gartner, if the newly merged company fails to align its product lines and marketing message effectively.

Second-place Dell, in contrast, far outperformed the rest of the market, with server shipments jumping 12.9% year-on-year. Dell's market share also increased – from 16% in the second-quarter of 2001 to 18% in the second-quarter of 2002. Sun Microsystems, in fourth place, also enjoyed a year-on-year growth in shipments of 10.8%. IBM's server shipments declined by 2.9%, however, and the company's market share slipped from 15% to 14.5%.

The server-buying trend may be moving upward, at least on a regional basis, says Gartner. The US market experienced its second consecutive quarter of positive growth, with total shipments increasing by almost 10% compared to the same quarter in 2001.

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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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