IDC: Sun Microsystems, blade servers continue growth

IDC study released today shows that server revenue remained mostly flat, with large gains seen from blade servers and Sun Microsystems.

Sun Microsystems Inc. has overtaken Dell Inc. for the third spot in overall server revenue, according to analyst firm IDC, while blade servers continue their rapid revenue growth.

The IDC study released today showed flat revenues for the most part, with overall server revenue growing by 0.6% since the second fiscal quarter of last year. But Sun had a 15.5% growth from last year, and blade servers saw had even bigger revenue jump: 37.1%.

Relevant Links:
Gartner, IDC: Sun revenue rebounds after two year skid

IDC: Server revenues up, shipments slowing down

Blade servers, which slide into chassis like books slide into a bookshelf, have been lauded for their ability to fit large amounts of processing power into a smaller envelope. According to IDC, blades only make up about 5% of total server revenue, so there has been and continues to be a lot of potential for growth.

"Definitely part of the story is they're starting from a smaller base," said Matt Eastwood, program vice president of worldwide server research at Framingham, Mass.-based IDC, adding that blade servers only account for about 5% of all server revenue. "There's also a strong association between the bladed form factor, and virtualization and consolidation."

Sun, meanwhile, continues its ascent up the server ladder, having surpassed Dell to take over the no. 3 spot in overall server revenue. The Santa Clara, Calif., company relies strongly on the revenue from its UltraSparc-based machines, but growth in its x86 servers, where Sun has embraced the alternative Advanced Micro Devices Inc. chip over Intel Inc's options, is strong.

"Sun was in the No. 3 spot at this time a year ago. Q2 of any given year is a good quarter for Sun, because it's their fiscal fourth quarter," Eastwood said. "Now we've seen Sun put up some nice numbers a few quarters in a row. It's kind of a commentary on them introducing a lot of new technology in the past year, and they have done a lot to stabilize their core install base."

Other findings from the IDC study:

  • Volume server (less than $25,000) revenue increased 6.2% from the same period last year, while midrange enterprise servers ($25,000 to $499,999) had a 3.5% drop and high-end enterprise servers ($500,000 or more) declined 6.9%
  • Linux server revenue increased 6.1%, Unix servers slipped 1.6% and Windows servers climbed 3.1%.
  • IBM and Hewlett Packard Co. (HP) maintained their first and second spots in overall server revenue, respectively, though both had small decreases from the second quarter last year. Sun was third, followed by Dell and then Fujitsu/Fujitsu-Siemens.

    Larry Singer, senior vice president, global information systems strategy at Sun said he had been predicting this turnaround for nearly a year for a couple big reasons. First, he gave credit to former Sun CEO Scott McNealy for investing heavily in the Galaxy and Niagara server lines. The other reason Singer cited was an up tick in Solaris adoption.

    "Once people have Solaris on their HP or Dell machine, they start comparing servers to ours and we win," Singer said.

    Eastwood added that he wondered how Sun was doing in terms of being able to draw people away from Linux, where growth has slowed, back to Solaris.

    Singer, meanwhile, admitted that part of Sun's strong showing -- and Dell's weakness -- was due to Sun's and HP's Opteron server lines. Dell only recently broke its embargo on AMD chips, but is now offering servers with from both AMD and Intel.

    Let us know what you think about the story; e-mail: Mark Fontecchio, News Writer

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