Gartner: HP Maintains Big Q1 Server Share Lead

Hewlett-Packard maintained its top spot for server shipments in the first quarter of 2014, maintaining a hefty lead over rivals IBM and Dell, according to research firm Gartner’s just-released server market-share numbers.

Worldwide server shipments increased 1.4 percent year over year, according to Gartner, while revenue declined 4.1 percent. The Asia-Pacific region, however, was a bright spot with 3.3 percent revenue growth and 18 percent growth in shipments.

HP’s share of the server revenue pie was 25.5 percent, followed by IBM with 19.8 percent and Dell with 17.9 percent.

IBM experienced the biggest drop in server revenue, 25.6 percent, according to Gartner. Dell’s revenue dipped 5.5 percent and HP’s was down 2.3 percent.

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HP extended its revenue share lead with 5.1 percent growth, Gartner reported.

’HP continued to improve its execution and also benefited from its competitors’ difficulties. Second-ranked IBM continued to suffer from cyclically weak product life cycles, but its 8.7 percent [revenue share] decline was also compounded by additional weakness for its x86 business,’ wrote Gartner in its report.

CB Technologies, a Westminster, Calif.-based Platinum HP enterprise partner, had a record first quarter for HP server sales, said CB Technologies founder and CEO Kelly Ireland. She said the company is on track to post a 25 percent increase in HP server sales this year.

A reinvigorated HP product line has turned the tide against all comers in the server market including Cisco, she said. ’We now have an HP server product line we can get behind and go into accounts head to head against Cisco UCS, Dell and IBM and blow them out of the water,’ she said.

IBM commercial and federal customers are looking closely at buying HP servers in the wake of the still-yet-to-be-finalized IBM x86 server sale to Lenovo. ’We are actively in discussions with many, many IBM customers that we couldn’t get a conversation with before the Lenovo deal,’ she said

Ireland said she expects HP server sales momentum to increase over the next several quarters. ’There was a period in the server market where HP lost ground, but now we are going back into those accounts and educating them on the rate of HP innovation and the increases in R&D and it is resonating with customers,’ she said.

Cisco experienced the biggest uptick in server revenue share, moving the needle to 5.4 percent up from 3.8 percent the previous year, representing a 37 percent share growth. When Gartner looked at increased shipments, Huawei and Inspur Electronics were the only server vendors in the top five to see growth. Huawei shipments increased 61 percent and Inspur Electronics, which made its debut on Gartner’s top five list, experienced 288.7 percent growth.

NEXT: Hottest Server Form Factors for Q1

Leading the revenue pack was commodity x86 server hardware, which increased 3.4 percent. On the flip side, RISC/Itanium Unix revenue declined 3.4 percent. Gartner said the biggest revenue hit came from the 'other' CPU category -- comprised primarily of mainframes -- which showed a revenue drop of 37.6 percent compared with the previous year.

Gartner reported rack-optimized server form factors climbed in shipments 1.4 percent and 1.7 percent in revenue in the first quarter. Shipments of x86 blade servers, on the other hand, decreased 3.9 points but increased 5.2 percent in revenue for the quarter.

’After some challenges in 2013, vendors will be relieved to see 2014 get off to a relatively good start,’ wrote Adrian O’Connell, research director at Gartner. ’The demand environment is stabilizing, but challenges remain. We expect users will continue to be conservative in their investments for some time, and platform migrations will remain a challenging factor. We are likely to see revenue growth in 2014, but the reality is that the market is operating from a significantly lower level than it was prior to the downturn in 2008.’

PUBLISHED MAY 28, 2014