SCIENCE

SAN JOSE, CA -- Slower sales of higher-end, midrange systems in the United States and Western Europe held back worldwide server shipments to minimal growth in the second quarter of 2001. The worldwide server market grew 0.7 percent, according to preliminary statistics by Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB). Worldwide server shipments reached 973,784 units in the second quarter of 2001, up from 966,779 units in the second quarter of 2000. Compaq remained in the top spot with 26.7 percent of the worldwide market, followed by Dell and IBM, garnering 18.0 percent and 16.7 percent of the market, respectively. While the market share positions of the top five worldwide vendors haven't changed, only Dell and IBM had positive year-over-year growth, 28 percent and 10 percent, respectively. "The economic slowdown predominantly affected high-end enterprise systems. Customers began to cut back or defer purchases of expensive high-end server models and focused more on lower-priced systems," said Shahin Naftchi, senior analyst covering servers for Gartner Dataquest's Computing Platform Worldwide program. The U.S. server market showed negative 11 percent growth, with shipments of 347,045 units in the second quarter of 2001, down from 390,951 units in the second quarter of 2000. Dell and Compaq share the lead in the U.S. market with 28.5 percent of the market, followed by IBM, Sun and Hewlett-Packard with market share of 17.1 percent, 7.9 percent and 7.7 percent, respectively. IBM and Dell were the only vendors in the top five to experience growth in both the U.S. and worldwide markets. "IBM's recent aggressive attacks on HP and Sun customers began to bear fruit for the company, while HP's continuing channel conflicts may have helped IBM's attacks become more successful," said Jeffrey Hewitt, principal analyst for Gartner Dataquest's Servers Worldwide program. "Sun's UltraSPARC III issues and current poor reputation for service and support hastened its decline and this shows that its incredible momentum from 2000 has dissolved for now." These results are preliminary at this time. Final statistics will be available soon to clients of Gartner Dataquest's Servers Quarterly Statistics program. For more information visit www.gartner.com