Virtualization Track at Cloud Expo

IDC says worldwide server revenues declined 3.9% to $13 billion in the fourth quarter. That's the bad news.

Happily for those that sell servers, however, Q4 was the second quarter in a row in which sales perked up a bit. Shipments were up 1.9% to 1.9 million units and this brighter picture is expected to continue.

Looking back last year was nasty. Total servers revenues dropped 18.9% to $43.2 billion and unit shipments were off 18.6% to 6.6 million units.

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As you might expect, volume systems showed the most elasticity and in Q4 were up 9.9% on the revenue side. That's the good news.

Revenues from mid-range servers priced between $25,000 and $250,000, however, declined of 5.3% and the high end took another nasty 23.6% hit that IDC pins on product refreshes that were due in early 2010. It says this is the first time since 3Q08 that all three server segments have not seen a year-over-year revenue decline in the same quarter and claims it's evidence a recovery is underway.

In fact it called it the "beginning of a market inflection."

According to IDC group VP Matt Eastwood, "Optimal conditions for market inflection occur only once a decade and IDC believes that market shares could shift dramatically as the winners and losers of this new market cycle are determined, with those who are best positioned to meet increasingly sophisticated IT needs across the market gaining share." That's good news and bad news for some.

Worldwide in Q4 IBM was still ahead in revenues with a 35.4% share despite a revenue decline of 6.5% attributed to its mainframes.

HP was number two with 30.5% and a revenue increase of 0.8% thanks to its x86 servers. Dell was third with 11.5% of the revenues on 4.5% revenue growth. Sun was fourth with 8% market share though its revenues declined 17.3% and Fujitsu came in fifth with 4.6% on a 7.2% increase in revenue.

Windows server revenue increased 13.7% and unit shipments were up 5.5%. The Q4 revenue of $5.4 billion wracked up represented 41.6% of all server revenue. IDC says it's the highest Windows server hardware revenue in two years.

Linux server revenues were up 6.1% to $1.9 billion and now represent 14.7% of all server revenue, up 1.4 points year-over-year.

Unix servers revenues were off 18.1% which IDC attributes to customers waiting for some kind of clarity on the Sun-Oracle server roadmap as well as new IBM Power7- and HP Itanium 9300-based servers. Worldwide Unix revenues totaled $3.9 billion in the quarter, or 29.9% of the total server spend, down from 36.2%. It's like glaciers and global warming.

IDC reckons the x86 server market grew 12.6% in Q4 to $7.3 billion with units up 3.8% to 1.9 million and says all of the top five vendors were up on the revenue side. HP led with 39.3% revenue share. Dell was second at 20.3% and IBM was up 3.5 points to 19.6%. But because of the weak first half, worldwide x86 server revenue for the year fell 14.6% to $23.7 billion and shipments were off 17.8% to 6.4 million units.

With everything else in the tank that meant that x86 servers captured more than 55% of all server revenue and more than 96% of all server units shipped worldwide by IDC's count.

The researcher muses with the fact that the fourth quarter has always been the best for non-x86 servers but wasn't this time. Non-x86 servers have never held less than 50% of revenue in the fourth quarter, it says, but this time though x86 boxes claimed more than 57% of the revenues. IDC calls it a "significant shift" and expects it to continue as customer try to save money.

Blade servers scored a personal best in Q4, up 30.9% in revenues and 8.3% in units.

Including x86, EPIC and RISC blades, they accounted for $1.8 billion or 13.9% of all revenue. More than 87% of it was captured by x86 systems where blades now represent 21.4% of all x86 server revenue. HP is first with 52.4% revenue share and IBM claimed 28.4%.

IDC said IBM significantly outperformed the market with year-over-year revenue growth of 64.1%, gaining 5.7 points of blade market share in the process.

For the full year, worldwide blade server revenue was up 2% to $5.4 billion, the only major server market segment to experience growth in 2009. IDC says blades pretty much retained their ASPs.

IDC offered no 2010 forecast. Gartner, however, figures shipments could be up in the mid- or high-single digits. Vendors all claim enterprise spending is coming back.