The decline is a little better than Q1's 5% drop, but still points to a bleak demand environment, as enterprise attempts to improve server efficiency (via consolidation and virtualization) and a mix shift towards cheaper, white-label servers preferred by Internet/cloud companies hurt sales. (PR)
IDC is even more pessimistic, estimating revenue fell 6.2% and units 1.2% (lower ASPs). (PR)
x86 servers (largely INTC-based) continue gaining share: Gartner thinks sales rose 2.1% Y/Y and units 4.5%. The opposite holds for Unix servers: sales -25.3% and units 27.4%. "Other" server sales (inc. IBM mainframes) rose 6.9%.
IBM and H-P (HPQ), whose enterprise hardware units have fallen on hard times, remain the industry's top vendors, but continue to bleed share. IBM's share fell 160 bps Y/Y to 25.6%, and H-P's 420 bps to 25%.
DELL and Cisco (CSCO), as demonstrated by recent earnings numbers (I, II), remain share gainers. Dell +210 bps to 17.7%, Cisco +150 bps to 4.4%. Oracle (ORCL), which is seeing rising (Intel-based) engineered system sales and plunging Unix/SPARC CPU server sales, is assigned a 5.8% share (-20 bps).
"Other" vendors, including white-label firms, had a 21.5% share (+230 bps). IDC estimates sales of density-optimized servers (beloved by Internet companies) rose 26.6% to $735M, and now make up 6.2% of server revenue.