For Immediate Release
Chicago, IL – March 1, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: International Business Machines Corp. (IBM), Hewlett-Packard Co. (HPQ), Dell Inc. (DELL), Oracle Corp. (ORCL) and Cisco Systems (CSCO).
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Here are highlights from Friday’s Analyst Blog:
IBM Leads Server Market
According to research firms – Gartner and IDC, worldwide server revenue fell 3.2% to $12.6 billion in the fourth quarter of 2009. However, unit shipments increased 4.5%. The firms expect the server market to resume growth in 2010 due to improvement in IT spending.
IDC said global factory revenue fell 3.9% year over year to $13 billion in the fourth quarter, but unit shipment rose 1.8% to 1.9 million.
Although global sever revenues fell, International Business Machines Corp. (IBM) has once again topped the server market in the fourth quarter of 2009 with a 35.4% factory revenue share, according to research firm IDC. Hewlett-Packard Co. (HPQ) was second to IBM, with 30.5% factory revenue share in the fourth quarter.
For the full year 2009, overall server revenue fell 18.3%, while units fell 16.6%, according to Gartner. However, IDC said that server revenue fell 18.9% to $43.2 billion in 2009, with shipments falling 18.6% to 6.6 million units. For the full year 2009, IBM was also the top server vendor with 32.9% factory revenue share compared to H-P’s 29.9%, according to IDC.
Moreover, Dell Inc.’s (DELL) server revenue was up 8.3% in the fourth quarter, according to Gartner. However, Sun Microsystems, which was recently acquired by Oracle Corp. (ORCL), continued to struggle, as Sun’s server revenue fell more than 20% in the fourth quarter of 2009.
For 2010, Gartner expects server shipment growth in the mid to high-single digits with revenue growth to be slightly below the unit shipment growth. IDC did not provide any forecast for 2010.
The growth in the server market in the fourth quarter came from higher x86 revenues, which increased 14.3%, while shipments increased 6.3%. IBM had the largest year-over-year share gains among major x86 server vendors in each quarter of 2009.
IBM experienced the largest x 86 server growth rates of the top five server vendors in the fourth quarter and holds a 19.6% factory revenue share, a 3.5 point year-over-year share gain, the fourth consecutive quarter of revenue share gains, according to IDC. IBM outpaced H-P, which gained just 0.9 points of factory revenue share during the quarter.
IBM’s Systems and Technology segment has also been growing. IBM continued to lead the market for servers costing more than $250,000, holding 61% factory revenue share, led by its System z mainframe. The company is currently focusing its investments on differentiating technologies with high-growth potential, including POWER6, BladeCenter QS22, BladeCenter-S, Systems z10, high-performance computing, virtualization and energy efficiency as part of its 2010 target.
IDC expects virtualization to be a $60 billion server market in 2010, and blade is an important part of this segment as bladed deployments of servers are virtualized twice as often as non-bladed. IDC reported that IBM significantly outperformed the blade market in the fourth quarter, recording year-over-year factory revenue growth of 61.4% in blades and gained 5.7 revenue share points. The overall blade market’s factory revenue grew 30.9%.
IBM’s new POWER-based virtualization offerings extend the company’s lead in UNIX virtualization. According to IDC, IBM is the leading provider of UNIX solutions and has led the market for the last 7 quarters based on a rolling four-quarter revenue average. According to IDC, IBM’s UNIX revenue share in the fourth quarter grew by 3.4% as customers continued to rely on the company’s virtualization and consolidation technology to trim costs. IBM gained 47.9% factory revenue share versus 23.7% by H-P.
H-P recently turned focus on virtualization across data centers, a segment which IBM is currently addressing. Dell’s PowerEdge M-Series blade servers will run on Windows Server 2008 and is expected to provide better performance and consume less energy than the comparable IBM BladeCenter H and HP BladeSystem c-Class systems. Additionally, IBM’s growing presence in the networking industry pits it against Cisco Systems (CSCO), which entered the computer server market with its blade server for data centers.
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