Sun Overtakes Dell In Worldwide Server Revenue

Sun Microsystems' overhaul of its server product line during the past few years appears to be paying dividends. The company passed Dell to become the third largest provider of servers worldwide, based on revenue, and was the only server supplier of the "big four" to post revenue growth in the most recent quarter, according to IDC.

Sun grew its server revenue in the second quarter to $1.59 billion, up 15.5% from $1.37 billion in the second quarter of 2005, says a new IDC report on the server market. That second quarter revenue was enough to push Sun past Dell, which had a revenue of $1.27 billion in the quarter, down 1.3% from $1.29 billion in the second quarter of 2005.

IBM maintained its leadership position with revenue of $3.81 billion, down 2.2% from $3.89 billion in the same period a year ago. Hewlett-Packard was again the second largest server vendor, with a revenue of $3.42 billion, down 1.7% from $3.48 billion in the second quarter of 2005.

Overall, server revenue worldwide totaled $12.29 billion in the second quarter, up less than 1% from $12.22 billion in the second quarter of 2005. IBM leads the market with 31% share, followed by HP with 27.8%, Sun with 12.9%, and Dell with 10.3%.

Sun has made significant changes in its server line over the past two years. The company began offering x86-based servers based on Advanced Micro Devices' Opteron processors in 2003 and updated that product line a year ago with its Galaxy line of servers. In addition, Sun jumped into the multicore server market with the introduction of systems based on its eight-core UltraSparc T1 processors late last year.

"We can attribute our share gains to three simple things," John Fowler, executive VP of Sun's systems group, said in a statement. "Mass adoption of the open source Solaris operating platform drives our ecosystem and visibility. Our Sparc and x64 products are absolutely decimating the competition. And finally, our ability to provide roadmaps based on Sun's legendary research and development lets customers rely on Sun for the entirety of their systems needs. The data is irrefutable: We are back."

Dell is also planning a revamp of its server line with two-socket and four-socket systems based on AMD's Opteron processors by year's end. Those servers will follow Dell's introduction of desktop PCs based on AMD's Athlon processors next month, Dell's first ever use of non-Intel processors.