Mainframe sales push IBM past HP as top server vendor

Server sales surged in 2010 as customers invested more dollars in higher-end machines

In an age of seemingly disposable servers, there are still organizations out ready and willing to plunk down hundreds of thousands of dollars for good ol' big iron -- enough so over the past year to make IBM the leader of the server market based on revenue, according to IDC. HP still rules the x86 market, however, and maintains it's still the leader of the server world.

Whichever way you want to pick your winner, there's no escaping the fact that 2010 was a big year for server vendors. Overall revenue from worldwide sales increased by 11.4 percent to $48.1 billion, further demonstrating that companies are loosening their purse strings as the economy recovers. Worldwide unit shipments increased 15.3 percent to 7.6 million units.

Big iron means big revenue
Worldwide server revenue for Q4 was $15 billion, up 15.3 percent year over year; server shipments for the quarter were up just 6.1 percent. Interestingly, a healthy chunk of that revenue trickled into IBM coffers through sales of its high-end System z mainframe systems, according to IDC.

Jean Bozman, research vice president of IDC's Enterprise Platforms Group, attributed the increase demand for System z to IBM's strategy of "closely linking [the platform] to a distributed-system blade chassis running POWER and x86 systems for workloads with mainframe affinity."

That hybrid-system combo sated customer demand for increased capacity -- a necessity as the data explosion continues and computer clouds gather, according to Bozman.

Overall, IBM reaped $5.59 billion in revenue in Q4, a 21.9 percent increase year over year. That's about $1.1 billion more than HP, the second-place earner for the quarter, raked in for the quarter.

Thanks to that strong fourth quarter, IBM was also able to take the lead over HP as the top vendor in terms of worldwide revenue: Big Blue finished the year with revenue of $15.36 billion, while HP ended the year with $15.32 in revenue, by IDC's account. In terms of market share, IDC puts IBM's portion at 32.7 percent and HP's at 29.8 percent.

IBM and HP are far ahead of the remaining top five server vendors: Dell finished 2010 with 12.1 percent of the market with overall revenue of $7.01 billion, up an impressive 34.2 percent year over year. Sun, despite being consumed by Oracle, finished the year with a share of 8.8 percent and overall revenue of $3.28 billion, a 14.4 percent drop year over year. At year's end, Fujitsu finished with 5.1 percent of the market and total revenue of $2.19 billion, representing zero change year over year.

HP still rules the x86 market
Were it not for those mainframe sales, the picture would be different as x86 server sales soared in Q4. The market swelled by 21.4 percent to $9 billion worldwide, and unit shipments increased by 6.7 percent to 2 million servers. According to IDC, this is the highest quarterly revenue ever reported for x86 servers as the architecture accounted for 59.7 percent of all server spending.

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