Gartner: x86 server sales growth slowed in Q4

Sales growth for x86 servers slowed in the fourth quarter of 2006 as buyers adopted virtualization technology and waited for quad-core processors, according to a Gartner report released Thursday.

Hewlett-Packard sold the most servers, but IBM collected the most money for them in 2006, the report said.

Worldwide server shipments in the full year 2006 grew by 8.9 percent to 8.2 million units, but revenue grew only 2 percent to $52.7 billion, compared with 2005, according to Gartner.

HP led the competition in server shipments, sending 2.2 million units out the door, up 8 percent from 2005. But IBM took the top spot on revenue with $16.9 billion, up 1.7 percent from the previous year.

Shipments of x86 servers, the most widely deployed server platform, slowed in the fourth quarter, which held down full-year totals, said Gartner analyst Jeffrey Hewitt.

The growth was "slower ... than we have seen in most recent years," Hewitt said in a prepared statement. "Most of that slowdown seems to be attributable to a lengthening of the sales cycle due to the anticipated introduction of quad-core x86 processors, with some lesser impact from x86 server virtualization."

Virtualization software increases the utilization rate for servers, so a company could buy fewer servers than without virtualization.

The report also showed continued strength for Sun, which posted a 15.4 percent gain in server revenue in 2006 to $5.7 billion. Sun also increased its revenue market share to 10.8 percent, replacing Dell (10.3 percent) in the number three spot. IBM led with 32.2 percent of the market, followed by HP at 28.2 percent. While Sun was the only vendor to report double-digit revenue growth, it shipped just 368,000 units, about one-seventh the number of units that market leader HP shipped.