GOVERNMENT

SAN JOSE, Calif.--(BUSINESS WIRE)--April 29, 2002--The tough market conditions experienced by the server industry continued into the first quarter of 2002. Worldwide server shipments totaled 1.09 million in the first quarter of 2002, an increase of 0.6 percent over the first quarter of 2001, according to preliminary statistics by Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB). "The economic downturn and weak global business environment continue to have a great impact on customer's buying behavior," said Shahin Naftchi, senior analyst covering servers for Gartner Dataquest's Computing Platform Worldwide program. "Businesses are not ready to spend on tech products unless it's absolutely crucial. Customers mostly purchase the least expensive systems to meet their short-term needs and can show a quick return on their IT investment." Compaq remained in the top spot with 22.8 percent of the worldwide server shipments, followed by Dell and IBM, with 17.8 percent and 14.3 percent, respectively. Dell was the only vendor to record positive double-digit year-over-year growth. The U.S. performance in the first quarter of 2002 was more positive than expected. The U.S. server market showed a 7.6 percent increase, with shipments of 419,622 units, up from 390,027 units in the first quarter of 2001. Dell increased its lead in the U.S. market with 26 percent of unit shipments, followed by Compaq with 21.4 percent. "Dell's build-to-order model allows it to rapidly pass along component price reductions to its customers, thereby improving its price competitiveness," said Jeffrey Hewitt, principal analyst for Gartner Dataquest's Servers Worldwide program. Gartner Dataquest analysts said it appears the U.S. market is starting to stabilize. Because of the length of server purchasing cycles, the performance of the next two quarters will be crucial in giving a better indication of server market recovery. These results are preliminary. Final statistics will be available soon to clients of Gartner Dataquest's Servers Quarterly Statistics program. This program offers a comprehensive, global market information service that analyzes and documents the server industry.