Analyst Says Dell Stands to Gain First in Server Rebound

Nobody’s going to argue with the fact that x86
server sales were dismal in 2009. Blame it on a combination of a recession that
tightened IT budgets together with the effects of virtualization and server
consolidation and purchase delays.

But what will 2010 look like for VARs looking to sell server hardware to
customers? Plenty of people in the industry have high hopes for server sales
next year due to the release of Microsoft Windows Server 2008 R2. And server
manufacturers such as Dell and Hewlett-Packard are rubbing their hands together
in anticipation of 2010, talking about a big PC refresh next year during their
recent earnings calls.

But Bob Gill, managing director of server research at TheInfoPro, says while
some spending will rebound, there won’t be huge growth, in the server market
particularly. Servers enjoyed big sales during 2007 and 2008, he says, and
there’s a lot of capacity out there still. Nevertheless, the vendor most likely
to gain in the server space in the short term is Dell.

"I show a good rebound for Dell late this year and in early 2010,"
says Gill. "Their price-sensitive customers were the first to tail off in
spending" so they will be the first to return. HP will not see as good a
rebound, he predicts.

Meanwhile, IBM has dropped off the map in terms of x86 sales, says
Gill.

"They’ve put a lot more emphasis on the higher-margin big-box server, and
x86 seems to be an afterthought for them, so a lot of their customers have
moved over to Dell or HP," says Gill. "They’ve fallen from No. 1 in
the market to a distant third. HP has left IBM in
the dust."

Gill notes that Lenovo, which licenses IBM’s
x86 server technology, was selling the same product cheaper than IBM at
a recent trade show. "What would you buy?" he asks.

As for Sun Microsystems, Gill says he believes it will have "a really bad
year next year."

While sequential quarterly server sales overall have been on the rise, the
comparisons are to the deep gully in the market created during the recession
and year-over-year comparisons are still dropping, according to analyst company
IDC. However, IDC
says that server sales are gaining momentum and will continue to do so for 2010
as new chips from Intel and AMD and new software from Microsoft drive sales.