Q2 Sees Server Growth Despite Midrange Decline

Taking a look at server sales in the second quarter showed that things have stayed pretty steady. This is extra good news considering there was a decreasing demand for midrange systems, according to research firm IDC. During this time, vendors as a whole saw their server revenue increase by 6.1% year over year to $13.5 billion. In addition to that, server shipments also increased by 3.2% from one year ago.

Moreover, revenue in the market also saw an increase on sales of higher-end servers and lower-end servers  used for hyperscale computing. However, the demand for midrange servers decreased by 5.4% year over year. This could be attributed to the recent ending of the x86 server refresh cycle, according to IDC.

In the second quarter, HP contained its top spot as the market leader with a share of 25.4%. The company's density-optimized servers were also in high demand as sales of the products saw a major increase of 119% year over year. Dell came in second place with a 17.5% share as its blade servers and rack servers experienced healthy growth.

Get a Quote on a Laptop Rental for Your Business Event! Rentacomputer.com offers Laptop Rentals to over 1,500 cities in the United States!

Coming in third place was IBM and the company was also the only vendor in the top five to see its market share and revenue fall during the quarterly period. IBM sold off its x86 server business to Chinese PC developer Lenovo last year and, as a result, its server revenue saw a hefty decrease of 32.9% year over year.

On the other hand, Lenovo saw its server revenue completely skyrocket by over 500%, which was a definite benefit from the acquisition deal with IBM. The China-based company is also hoping to become a major player in the server industry as it has begun diversifying away from its traditional market of PC sales. In addition to that, Lenovo also reached a statistical tie with Cisco for fourth place in the server market.

In terms of geography, the United States was the fastest-growing market for servers, with 12.6% year over year growth. The Asia Pacific region, which excludes Japan, came in second to the United States with 12% growth.

With the x86 server refresh cycle over we can probably assume that midrange servers will continue to see a decline. However, with the numbers of growth posted by both the high-end and low-end markets, we can also assume that the server market is going to steadily increase.

Content originally published here

---

Sharing this story on Social Media? Use these hashtags! #Servers #Dell #HP #IBM #IDC #Lenovo #Cisco

Lenovo Calms Server Team After Rivals Question IBM Deal

There is a lot of uncertainty over Lenovo's acquisition of IBM's server business, so much so that other companies are taking shots at IBM, trying to cause confusion and anxiety among employees and investors. However, Lenovo is taking measures against such things and even released a memo to its server sales team, urging them to ignore any "uncertainty and doubt" that rival companies are trying to sow over the decision.

According to the memo, "As the old saying goes, those who live in glass houses, shouldn't throw stones." The memo doesn't single out any company in particular, though Lenovo is probably referring to HP CEO Meg Whitman. Whitman had stated on two separate occasions that she hopes to take advantage of uncertainty surrounding not only Lenovo's acquisition of IBM's server business but also of Dell making itself private.

According to a statement by Whitman at a financial conference, "I have to say, we look like the paragon of stability in the industry right now and we aim to capitalize on that." Lenovo announced way back in January that it was buying IBM's x86 server business for a cool $2.3 billion. Upon completion of the acquisition, Lenovo stated that it had hoped to recreate the success it had integrating IBM's PC division. Lenovo bought IBM's failing PC business back in 2005 and has subsequently become the world's largest PC maker.

For Your Next Short Term Server Rental Call www.Rentacomputer.com
 Today At 800-736-8772

According to Lenovo's internal memo, it is the other server makers that are unstable. According to Executive Vice President of the Lenovo Enterprise Business Group Gerry Smith, "Our competitors in the enterprise space are both in the midst of major corporate transitions. As their customers try to avoid the real uncertainty and doubt created by those upheavals, you should feel very confident in representing Lenovo and the great products and services we offer."

Lenovo went on to say that it plans on keeping IBM's x86 server business intact and continue offering customers the same products, service and support. "Most important, we are committed to IBM's product roadmap, and will extend support end-of-life for any current product offerings. We bought this business with the promise of continuity to customers, both ours and IBM's," Smith wrote in the memo.

Lenovo's current product line consists primarily of one and two socket servers purchased by SMBs (small to medium sized businesses). Lenovo was the world's 9th largest server vendor in Q3 of last year. In that time the company shipped 57,929 units, which is a poor stat compared to HP's 669,000 units. With this acquisition, Lenovo enters into the proverbial big leagues of the serer market. IBM is the second largest server vendor in the world, only slightly behind HP.

First Licensed Server Refurbishing Plant Opened in China by IBM

Last month, IBM announced that it had just opened its first facility in China with the main purpose of refurbishing and reselling old computer servers. Financially, this is a great move for IBM as the market for refurbishing and reselling computer servers is expected to increase to $2 billion in China by 2014.

The United States and Europe's exporting of electronic waste to Asia over the past 20 years has brought up some major concerns about the impact this has on local environments as well as the low-paid workers who are in charge of dismantling the toxic-heavy computers and other components to recover valuable metals and parts.

However, the increasingly profitable economy in China has created a significant e-waste problem of its own. China's government even has a 5-year economic plan that encourages recycling and remanufacturing computers in order to keep them out of landfills. According to General Manager of IBM Global Asset Recovery Services Richard Dicks, "In China, they'll use them for five, seven or nine years and they're basically landfill when they come out."

IBM's plant opened back in February in Shenzhen, very close to another IBM factory. The factory is expected to refurbish 100,000 servers and PCs every year by 2014. This feat will be accomplished by installing new memory and storage and packaging them for resale to the domestic Chinese market. According to Dicks, "The Chinese market is huge from a server perspective."

The supply of old servers came mainly from China as equipment leases expired and customers started to turn in old machines and equipment. IBM also operates other refurbishing plants around the world, taking in 33,000 metric tons of old equipment every week. That diverts nearly 97% of the weight of old machines away from landfills according to IBM.

Dicks also stated that IBM had also been negotiating with the government in China for the last 2 years to license the Shenzhen refurbishing plant and that he expects IBM's competition to eventually establish their own facilities. "The thing we talked to the Chinese government about is that it's really easy to buy a new computer but it's really hard to get rid of one. We're the first licensed facility and we have a first-to-market advantage," Dicks said.

Source: Forbes - IBM Opens China's First Factory To Refurbish Old Computers, Tapping A $2 Billion Market

Computer Service Now

Asia-Pacific Server Market Experiences Growth

The first quarter of 2011 saw strong growth in the Asia-Pacific server market. Shipments rose 21% compared to the first quarter of 2010, just one year ago. In addition to that, server revenue increased 29% year-over-year.

The Australian market also experienced growth, however, the market growth was modest. Server revenue in the Australian market increased by 10% this quarter despite shipments falling 5% compared to last year's first quarter.

According to Erica Gadjuli, Gartner Principal Research Analyst, "Enterprise spending on server consolidation using virtualization technology continued to be a key driving factor for server market growth in this region." x86-based server sales also grew 21% in shipments as well as 31% in revenue.

IT investments in key verticals like financial services and the public sector led to year-on-year revenue growth in mainframe and RISC/Itanium Unix servers. Mainframe and RISC/Itanium Unix servers grew 137% and 15.3% respectively during the first quarter.

Blade Servers, which include x86 and non-x86 based, did better than the rest of the market by growing 38% by shipments and 68% in revenue year-over-year compared to other servers like rack mounted, rack optimized, tower and standalone.

The leader in the server market for the first quarter was HP with shipments with a 30% share overall in Asia-Pacific. IBM held the leadership position in revenue, accounting for 41% of the entire market.

Dell was second in shipments with 21.8%, followed by IBM with a 20% market share. Lenovo trailed in fourth with 5.1% with Huawei topping off the top five with 3.7%. All of these vendors in the Asia-Pacific region had their own moments of success during the first quarter of 2011 in both shipments and revenue, experiencing double digit growth year-over-year.

Source: ARN - Asia-Pacific server market on the rise

Rack-Mount Server rentals are ideal if your company needs an extra storage unit for company information while you are testing various types of storage solutions.

Whether you need a short-term rental, or a long-term lease we have the right kind of server for your needs.

Red Hat Linux Offered on a Per-Server Basis by IBM on Power Systems

IBM, along with Red Hat, a commercial distributor of Linux, have teamed up to provide Enterprise Linux 6 on IBM's Power Systems that are sold by Big Blue along with first level and second level support provided by Big Blue. Obviously, that isn't very new news.IBM has been a huge OEM partner with Red Hat for years now. What is new is that in an announcement letter, IBM and Red Hat have revealed a per-server license price for Power Systems machines running RHEL 6 which started up back in November. With RHEL 6 out but not certified on the new Power iron, IBM began giving away a free RHEL license on Power Systems Express configurations. IBM has now worked with Red Hat in order to tune up RHEL 6 for Power6, Power6+ and Power7 servers. This includes integration with IBM's PowerVM hypervisor for Power iron. The new licensing for RHEL 6, which became available on April 15th, allows for every pair of sockets in the box to be licensed with 15, 30 or 60 logical partition ceilings per socket pair. A standard 12x5 business hour support contract for RHEL 6 for a socket pair on a Power Systems box costs $1,350 per year for a setup with a 15-LPAR ceiling. Now if you want to increase that to a priority 24x7 support, then your price will increase to $2,150 per year. Doubling up the LPAR ceiling to 30 on a four-socket Power System doubles your support costs and if you quadruple it up to a 60-LPAR ceiling on an eight-socket machine, you quadruple your prices to $5,400 and $8,600 for a 12x5 or a 24x7 coverage. IBM, just like Red Hat, does give discounts to customers who purchase a three-year contract. IBM did, however, stop selling the earlier RHEL 5.5 on April 12. Source: IT Jungle - IBM Offers Red Hat Linux on a Per-Server Basis on Power

The Security Camera Blog Get a regular infusion of new security camera technology information, video and news. Easy to subscribe in a reader or by email.

We help you stay in touch with the latest security camera features.

IBM Cancels Irish Server Works

In a recent report from the Irish Times, it appears that IBM is cutting off what is left of the server manufacturing jobs at the company's Emerald Isle factory. The reason for the loss is said to be due to the fact that IBM is shifting its server-making to factories the company owns in Shenzhen, China.

With this cutback IBM has lowered its overall workforce in Ireland to around 4,000 employees. This number does include the 190 jobs that IBM just cut as well as 200 employees that the company recently added back in March for a Smarter Planet research center and an additional 100 added to the company's software labs around the country.

IBM released in a statement not too long ago that they were moving their high-end server manufacturing for the Asia/Pacific and EMEA regions to factories in Singapore. IBM did note that they were keeping a "foot in the door" in the European Union by keeping entry and mid-range server manufacturing in the factory IBM has in Mulhuddart, which lies just outside of Dublin.

IBM has also shut down and outsourced all of their x64 server plants located in Scotland aside from very high-end System z and BladeCenter platforms. The Power Unix manufacturing that IBM had in Austin, Texas was also recently moved to Rochester, Minnesota.

Due to this recent cut in jobs, Ireland will be out of the IBM server manufacturing business completely. This also raises questions as to when IMB's mid-range Power Systems will be shifted to China as well. IBM said that they will try to find jobs for as many of the 190 employees as possible. IBM said that all of the 190 employees will receive five weeks of severance pay for every year they served with the company.

According to IBM, "This change will place us closer to our growth markets and suppliers while providing greater operational efficiency and cost savings." The shipping costs to get Power and z10 processors to China or Singapore are fairly small. However, the expensive shipping costs it takes to transport finished Power Systems and mainframe servers to European and African customers is definitely offset by the lowered labor costs of China and Singapore.

Call Rentacomputer.com today at 800-736-8772 if you are in the market for a Nationwide Copier Rental.

Server OS Landscapes Going with the Flow

The world of UNIX and Linux server operating systems right now is anything but boring. However, that may not be the best thing, especially for enterprises that want a background of stability and certainty when they choose a server OS to power their business.

If you use Sun UNIX, then you know all about this. The OpenSolaris project just recently disintegrated into nothing after a long run of uncertainty and was replaced by something probably based on the Illumos project like the OpenIndiana spork. Users of Solaris weren't greeted with such a rude awakening though. Their enterprise OS hasn't actually gone away. They have, however, come to terms with the fact that UNIX is now a product of Oracle which means it is being developed along a very, very different style then it was under Sun.

The Suse Linux Enterprise Server (SLES) is under Novell and is also one of the two leading open source server distributions. The server itself runs just fine but, being owned by Novell, which is known for being a little chaotic, has cast a shadow over the product.

On a lighter side, if you are a Red Hat shop, you can rest assured that you are running the number one open source server OS from a dependable and stable company. In fact, Red Hat Enterprise Linux (RHEL) is respected so highly that Oracle uses it as a basis for its own Linux offering.

But how long will this last? Oracle has decided to drop Red Hat compatibility in its Oracle Linux Product after announcing the Oracle Unbreakable Kernel for Oracle Linux at Oracle OpenWorld last week. According to Oracle, it is a "fast, modern, reliable kernel that is optimized for Oracle software and hardware." Oracle also promises that the new kernel will offer a 75% performance gain demonstrated in OLTP performance tests over a Red Hat compatible kernel, a 200% speedup of Infiniband messaging and 137% faster solid state disk access.

It is rumored that VMware may buy Novell's Linux business, and if that does happen, then Red Hat is going to be a minnow among sharks in the server OS market going forward. To put it into perspective, Solaris is a part of a $140 billion Oracle Corporation while SLES would be a part of a $36 billion VMware. As for Windows, AIX and HP-UX, they are each owned by corporations worth some $220 billion (Microsoft), $166 billion (IBM) and $90 billion (HP) respectively. Red Hat is definitely the odd one out with only $7 billion.

That leaves IBM, HP and Microsoft. All these companies are fairly predictable and boring, but they are also huge. However, with all that is going on in the enterprise operating systems market at the moment, big, boring and predictable may be the perfect thing for many potential customers.

Call Rentacomputer.com today at 800-736-8772 if you are in the market for a Nationwide Copier Rental.

Server Markets Downward Spiral Begins to Slow

After a dismal first half of the year for the server market involving a large decline in sales and average selling prices (ASPs), it seems things aren't quite as bad as they could be. A third quarter server market survey from Gartner states that worldwide server revenues have continued to fall by 15.5 percent to $10.7 billion, and unit shipments are falling at an even faster pace down to 17.1 percent to 1.92 million units. At first glance these numbers may look bleak, but there is room for cautious optimism as we head into the fourth quarter and 2010.

The bright side of it all? The descent in sales and Average Selling Prices have begun to slow. Jeffrey Hewitt, research vice president at Gartner, expresses his optimism for the server market. "It is important to put the yearly declines into perspective," said Hewitt in a statement. "Looking at the third quarter results from the sequential perspective, they showed an increase of 13.8 percent in shipments and 10.2 percent in revenues when compared to the second quarter of this year. That suggests that the market as a whole is showing signs of stabilization as we move toward the end of 2009." And indeed these numbers are a considerable improvement over the second quarter which was painful across the board. The second quarter showed a 30.4 percent plunge in unit shipment year-over-year which makes the 17.1 percent decline in quarter 3 seem like a large improvement.

Current Server Market Standings

In the third quarter, Gartner placed IBM at the top of the list once again with a total market share of 31.7 percent and $3.38 billion in total server sales, which are down 12.3 percent. IBM Mainframe sales and Power Systems sales were down while System X sales were up. Coming in at number 2 is Hewlett-Packard with a revenue decline of 15.1 percent to $3.22 billion and a market share of 30.2 percent . Dell came in third, with $1.42 billion in sales, down only 5.1 percent, and currently holds 13.4 percent of the market.

Sun Microsystems continues to suffer the worst of the losses with sales down 32.3 percent in the third quarter to $784.6 million. Sun's market share has dropped from 9.2 percent to 7.4 percent in just one year. Fujitsu, which sells servers using Sun's UltraSparc processor as well as x64 and Itanium processors, was down 10.8 percent to $550.2 million in revenue. Other niche vendors, such as Intel Itanium-based vendors and x86 providers have dropped a combined 23 percent year over year to $1.3 billion in sales.

Currently x86 servers account for 97 percent of the sales, which totals to 1.86 million units. Overall x86 unit sales have fallen by 16.2 percent while revenues fell by 11.4 percent to $6.32 billion. The Server Market was much harsher for RISC vendors - which are primarily Sun, Itanium and IBM Power-based servers. These RISC servers accounted for just three percent of total unit sales, but contributed 25 percent of overall sales revenue. This 3rd quarter RISC server sales fell by 37 percent on a unit basis year-over-year and 34.8 percent on a revenue basis. What's more, the defections to IBM and HP are really starting to show.

In the third quarter of 2008, Sun dominated 55.1 percent of the RISC market. However in Q3 of 2009, Sun only holds 44.0 percent. IBM on the other hand is up from 28.3 percent market share in 2008 to 33.6 percent in 2009, and HP saw an increase from 12.8 percent in 2008 to 17.8 percent share in 2009.

IBM server bug may cause data loss

IBM recently released a support article for their Blade Center and System X servers containing drives with the following model numbers:

ST31000340NS
ST3250310NS
ST3500320NS
ST3750330NS

The article states that the hard drives may become unresponsive after a power cycle when the drives attempt to create an event log event in an invalid location, and the drive goes offline. Once the drive goes offline, the data is inaccessible.

IBM is working on getting the firmware update for the hard drives to solve the problem, but until then IBM advises to power cycle the affected servers as little as possible.

To check if your server includes one of the affected drives, view the list of models in IBM support article H194623.

Server Sales Down

It is becoming harder and harder to close server sales in this economy. Client are trying to hang on to their capitol until the economy improves.

We are pushing leases so our clients can preserve their capitol.

Here is some info on falling server revenues for the last quarter.

5 Reasons to Lease File Servers:

1. Leasing improves your cash flow. The main advantage of leasing is that it frees up cash. Equipment leases rarely require down payments, though you may have to set aside some cash for a refundable security deposit. By contrast, loans to finance the purchase of equipment typically require down payments of up to 25 percent or more.
2. Leases are easier to finance than purchases. Before extending a capital equipment loan, banks will usually want to see two to three years of financial records — which most new companies do not have. Leasing companies, on the other hand, usually require only six months to a year of credit history before approving a furniture or office equipment lease.
3. Leasing makes it easier to keep pace with technology. Leasing is especially attractive if your business relies upon cutting-edge technology such as the latest computers, communications devices, or other equipment. A series of short-term leases will cost you less than buying new equipment every year or two. Some office equipment leases even have yearly computer upgrades built into them — eliminating that difficult decision of whether you can afford to upgrade or not.
4. Leasing allows you to afford more. While you might not be able to afford to purchase those pricey ergonomic chairs your employees are asking for, you may be able to lease them. Better furniture and equipment can create a more professional image and boost morale and productivity.
5. Leasing has balance sheet benefits. You may be able to exclude some leased assets and related obligations from your balance sheet. Such moves might improve financial indicators such as your firm's debt-to-equity ratio or earnings-to-fixed-assets ratio. Bear in mind, however, that accounting rules do require your balance sheet to report assets leased under certain types of agreements.