Gartner: HP hit hardest by slow server sales

Hewlett-Packard Co.’s server business took a beating in the second quarter as the company lost ground to all of its major rivals, according to data released Friday by Gartner Inc.

Overall, worldwide server revenue shrank to US$10.1 billion in the second quarter, down from US$11.6 billion in the same period a year ago – a 12.8 per cent decline. All of the major vendors saw their revenue fall, but HP and Compaq Computer Corp., now a single merged company, showed the largest drop-offs, according to Gartner.

HP’s total revenue from server sales slipped 21.3 per cent year-on-year, and Compaq’s fell 21.8 per cent over the same period. By comparison, IBM Corp.’s server revenue fell 7.8 per cent, while Sun Microsystems Inc. and Dell Computer Corp. each saw their revenue decline by 3.5 per cent, Gartner reported.

Meanwhile, IBM, Sun and Dell were able to gain market share against HP. IBM held its top spot in worldwide market share, garnering 29.6 per cent of total server revenue, an increase of 1.6 percentage points from the year before. Sun took the second-largest slice of the market with 18.4 per cent of revenue, up 1.8 points from the year before. Compaq’s share came in at 12.5 per cent, down 1.3 percentage points from the year before, with HP just behind at 12.2 per cent, down 1.4 points.

Combining the market shares of HP and Compaq would put the vendors ahead of Sun, however, with 24.7 per cent of server revenue. Dell saw its share of server revenue climb 0.7 percentage points, to 7.2 per cent, Gartner said.

Looking only at Intel Corp.-based servers, HP and Compaq fared little better, with both vendors losing ground to IBM and Dell, according to the Gartner figures. IBM was the only major vendor to see its revenue grow from last year’s second quarter, gaining 9.4 per cent. That gave it 16.7 per cent of Intel server market revenue, up 3 percentage points from the year before. Dell also gained share, climbing 1.3 points to grab 19.4 per cent of the market. Compaq slid 1.9 percentage points to claim a 24.6 per cent share, while HP dipped 1.3 points to 7.3 per cent.

Sun held its lead in the Unix server segment with 43.8 per cent of the market and was the only large vendor to gain share, Gartner said. HP followed with 23.4 per cent of revenue and IBM was third with 18.5 per cent. Compaq accounted for 4.1 per cent of the market. Sun’s share represented a climb of 5.8 percentage points over the previous quarter, while HP lost 1.2 points of share, IBM lost 0.9 points, and Compaq slipped 1.3 points, Gartner said.