Dell Gains Some Ground

The server market is now a very lucrative business for well known and established hardware manufacturing companies like HP, IBM, Sun and Dell. Dell had recently not such a good time on that market as its main rival, HP, quickly took over almost all the business with its blade server design that is way better than the traditional stand alone server. By using blade servers, HP managed to convince customers that they will gain a number of advantages like easy upgradability and service access, hot swapping and so on.

The problem for Dell was that the HP blade servers were eroding its own server market so the company launched its own blade design; but as there are several blade standards floating around and no centralized standard to be seen on the horizon, the Dell server design did not enjoy much success. Now the situation looks a little bit changed as the news site TheRegister reports after citing the market research and analysis firm IDC that suggests that the new Dell strategy for the server market starts to pay off.

It looks like Dell's revenues generated by the server market for the second quarter of 2007 jumped a little over 20 percent when compared to those registered during the same time frame last year. The global server market increased by 6.3 percent over the last year and hardware and related sales reached a combined value of $13.1 billion, which marks the best performing second quarter since the peak of 2000. Dell's market position consolidated at the Sun's expense and soon it may even take its place as the third largest server supplier in the whole world, but on the other hand, HP and IBM are leading the industry, like always. IBM holds most of the market, having around 32 percent of the total number of shipments and a factory generated revenue of more than $4 billion. This big market share was in part boosted by increased sales of System z mainframes which registered around 9 percent of all server generated revenues in the second quarter.

HP takes the second place on the server market, with a 28 percent share and an increase of 8 percent in revenues during the second quarter, reaching a total of $3.71 billion in factory revenue. The lower end servers from the ProLiant family of products and the blade servers were among the most sought after HP products. The third place belongs to Sun Microsystems that controls around 13 percent of the entire market with server generated revenues reaching $1.71 billion. Dell still remains that fourth player on the server market despite a big 20.2 percent jump in revenues. Factory revenues registered by Dell totaled $1.53 billion for an 11.6 percent share of the market. "Blade servers continue to be the fastest growing segment of the worldwide server market. Customers are increasing their blade deployments and vendors are broadening the blades product portfolio," said IDC analyst, Jed Scaramella. "IDC believes blades are in the next wave of product evolution and customer adoption. As IT organizations become more familiar with the platform, they are able to deploy blades in IT environments that are suited to take advantage the management capabilities, as well as the cost and serviceability benefits."