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Dell's server sales rise while HP and IBM falter

A rare bit of good news for Michael Dell
Fri May 31 2013, 12:55
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BELEAGURED HARDWARE VENDOR Dell received some welcome news from analyst outfit Gartner, which reports that the firm's server sales are outgrowing those of HP and IBM.

Dell's recent financials were nothing short of a disaster, with the firm seeing profits fall by 79 percent as a contracting PC market hit it particularly hard. However Gartner's figures show that Dell's server revenues will grow by 14.4 percent from the first quarter of 2012 to $2.1bn and take 18 percent of the server market.

What makes Dell's predicted growth so impressive is that IBM and HP, which Gartner ranks as the first and second largest server vendors by revenue, will see revenues fall by 13.6 percent and 14.4 percent, respectively. According to Gartner's figures, IBM and HP will be pretty much neck and neck in terms of revenue, with IBM generating $3.01bn and HP racking up $2.95bn in sales with 25.5 percent and 25.0 percent of the market, respectively.

Gartner's figures make good reading for Dell, which is trying to move away from selling low margin tin boxes and build its enterprise business. However the analyst outfit did offer some words of caution by saying that the x86 server market didn't grow in the first quarter of 2013.

Gartner research VP Jeffrey Hewitt said, "X86 server shipment growth was flat in the quarter, while revenue increased 1.8 percent. RISC/Itanium Unix servers declined globally for the period, down 38.8 percent in shipments and down 35.8 percent in vendor revenue compared to the same quarter last year. The 'other' CPU category, which is primarily mainframes, exhibited an increase of 3.6 percent in worldwide revenue."

That Gartner reported a decline in RISC and Itanium server sales is hardly surprising, and perhaps not too worrying for Intel because the firm's Xeon chips are still used in the vast majority of servers. Server vendors across the board will welcome low-power server chips from existing silicon vendors such as AMD and Intel and later this year ARM licensees as a way to increase revenue.

Nevertheless, for Dell, Gartner's report suggests that the firm does have some hope of becoming a major enterprise player. But judging by its financials, the growth of Dell's server business is, at least at the moment, not enough to offset the decline of its PC business. µ


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