GOVERNMENT

Worldwide server shipments in 2006 totaled 8.2 million units, an 8.9% increase from 2005, with Hewlett-Packard leading with 27.5 percent of the market, according to Gartner. Worldwide server revenue in 2006 reached $52.7 billion up 2.0 percent from 2005. Sun's server revenue increased 15.4 percent to $5.4bn during 2006. Of the top five vendors, only Sun gained revenue share for the year. By pushing its share ahead 1.2 percent to reach 10.8 percent, Sun reversed a yearly revenue share decline trend that had been occurring since 2001. "The fourth quarter of the year exhibited slower growth in x86 servers than we have seen in most recent years which constrained the results for the year as a whole,” said Jeffrey Hewitt, research vice president at Gartner. “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.” “RISC-Itanium Unix servers were weak for the year on a global basis falling 1.6 percent in shipments and 0.8 percent in revenue,” Mr. Hewitt said. “Mainframes had the strongest revenue growth of any segment for the year pushing ahead 3.9 percent over 2005.” IBM continued to lead the worldwide server market based on revenue in 2006. The company ended the year with an increase in revenue (1.7 percent for 2006). Gartner analysts attribute the company’s performance to 10.3 percent growth in System z/zSeries and 7.0 percent growth in System x/xSeries while System p/pSeries and System i/iSeries revenue both dropped for the year (1.2 and 14.1 percent respectively). In server shipments, Hewlett-Packard remained the worldwide leader for 2006. Its shipment growth was 8.0 percent. The ProLiant brand grew 8.5 percent in shipments for the year while HP Integrity climbed 30.1 percent. All other HP brands declined for the year which combined with the growth of ProLiant and Integrity produced the final 2006 result. Of the top 10 vendors in server shipments worldwide, Rackable Systems had the highest growth with a 68 percent increase for the year. The only other vendor in the top 10 to increase its shipment share was NEC (0.2 percent). Blade servers continue to be a high-growth segment with a revenue increase of 36.5 percent and a shipment increase of 33.0 percent for the year. IBM remained in the lead with blades, but HP pulled closer, as it narrowed the revenue share gap by 2.8 percent. IBM ended the year with a 41.1 percent revenue share of blades while HP finished the year with a 32.5 percent share. These two vendors continued to dominate this form factor and totaled almost 74 percent of the worldwide blade revenue share for 2006.