IBM Retakes No. 1 Worldwide Computer Server Spot

NEW YORK (Reuters) - International Business Machines Corp. IBM.N reclaimed the top market share spot among computer server companies worldwide during the second quarter, pushing Hewlett-Packard Co. HPQ.N back into second place, according to market research firm IDC.

IBM, which makes everything from computers based on Intel Corp. INTC.O microprocessors to giant mainframe systems that use proprietary semiconductor technology, had 30.4 percent of global server systems revenue during the quarter.

HP, which held the No. 1 spot in the first quarter, had 27.7 percent of total revenues.

The overall server market amounted to $10.62 billion in revenues, a slight increase from $10.60 billion a year earlier.

IDC said Sun Microsystems Inc.'s SUNW.O share of the market increased to 13.5 percent, while Dell Inc.'s DELL.O share of the total market decreased slightly to 9.2 percent in the second quarter.

IBM attributed its share gains to strength in sales of computers that run the popular Unix operating system, which are some of the most expensive systems that it sells. But IBM said prices of such systems remain under pressure.

"It's been street fighting in the high end of the Unix space for a while," said Bill Zeitler, who manages IBM's servers and storage division.

IBM competes with HP and Sun in that area. Sun held the largest share with 33 percent of the market, regaining the top spot over HP, which slipped slightly to second place with 31.4 percent of the market.

IBM's share rose to 24.6 percent of the market in the second quarter, up from 21.6 percent in the first quarter.

Mark Hudson, HP's vice president of marketing, said his company is investing in areas of the computer server business where it believes there is the most growth opportunity, including servers based on the Linux operating system, and said HP would regain the lead.

"We want to be the sustained leader -- not just one quarter at a time," Hudson said.

Well, IBM's engineering department certainly hasn't changed... This week one of our clients ordered 4 rack mount IBM servers. Sorry, I don't know the model numbers, but the big one (4 x XEON 2.4GHz processors, 9 x 36GB drives) had an interesting problem. Along with the processors, you need to install VRMs (Voltage Regulation Modules). One for each processor. They have these nifty blue handles that extends your reach and lets you plug them into recesses on the system board. However, two of those VRM handles conflict with the space taken up when you fully populate the memory riser board. The only way we could install all 4 processors and the memory was to cut off the handles from 2 of the VRMs!

Mark

What all these "who's on top" articles don't tell you is that anonymous, unbranded "white box" computers dominate the market. PC OEMs barely do any "engineering" anymore, even in servers.

Well, that may be the case in small environments, but a PC based system simply isn't reliable enough for the most part, for "enterprise computing." There are some "clone" XEON motherboards that have some features of a "server class" system, and you can add RAID and other features, but you simply can't beat the reliability and uptime of a "real" server class machine. And the integration of all the features makes life a lot easier when you only have to deal with a single vendor when stuff goes wrong.

Even the low end servers, like the Compaq (now HP) Proliant ML-330 or ML-350 have a number of server class features built in... But of course, HP has also seen the light, and they do have the TC series of entry level servers that are basicly PC based systems... But nothing will touch (IMHO) Compaq Insight Manager for managing a room (or even a cross-country multi-room) full of servers, at least not without spending tens of thousands of dollars on management software and hardware.

For instance, my company recently sold 38 Proliant DL-380 systems to a client, each with 1GB of RAM, 70GB of storage, and dual 2.8GHz XEON processors. They come standard with the Remote Insight "lighs out" board, which allows you to remotely watch the POST screen and run diagnostics on the system, before it even boots to the OS. They bought these to bolster their existing 50 servers they use for e-commerce.

Big corporations and governments understand the need for reliability and integration.

Mark

My company uses white box servers and simple cheap remote reboot devices as backup in case our colo guys fall asleep. But we've never had unscheduled downtime, anyway.

Because we run inexpensive servers, and we use open source systems, and extremely conservative software implementations that support huge numbers of users per server, we can afford hot and cold standby and geogrphic diversity. So even though our apps are consumer oriented, we can afford a literally bombproof deployment.

The only hard part was finding a colo company who would sell us only a quarter of a rack.

Isn't it nice to know that even if NK nukes LA and AQ anthraxes NYC, you'll still be able to play a multiplayer squad-level combat sim?

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