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Gartner, some VARs, see good server sales news

Some VARs take comfort in Gartner figures showing server hardware sales creeping up sequentially .

Solution providers hope that server hardware sales are at least solidifying after several quarters of decline.

More on hardware sales trends:
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"I do think the word is 'stabilizing' not 'growing,' " said Harry Kasparian, president of Corporate Technologies Inc., a Burlington, Mass.-based solution provider.

The company's anecdotal evidence supports new Gartner Inc. numbers that the research firm says indicate signs of stabilization. Server shipments rose 13.8% in the third quarter compared to the second quarter this year, and revenue was up 10.2% in that period.

That's the good news. The bad news is that server shipments and revenue declined year over year. Shipments fell 17.1% for the third quarter compared to the year-ago quarter and revenue was down 15.5% over the same period.

For the third quarter, all of the top server vendors posted sequential revenue growth with the exception of Sun Microsystems Inc., which saw its revenue off a whopping 32.3% sequentially. That falloff was no doubt exacerbated by uncertainty around Sun's fate as it waits for European regulators to approve Oracle Corp.'s $7.4 billion buyout of Sun.

A number of solution providers said some Sun customers are holding out, awaiting the completion of that Oracle deal, while others said a few customers have moved to other vendors including Hewlett-Packard and IBM.

Overall, it is unclear if the Sun server business is moving elsewhere or just awaiting a change in Sun's status.

One New Jersey-based IBM partner said several Sun customers have approached his company to buy IBM servers. They represent net-new business both to him and to IBM. But several Sun partners said most of their customers will continue to defer server purchases for at least a couple more months until Sun's future has been resolved.

According to Gartner, IBM led server vendors in revenue with nearly $3.4 billion worth of servers sold in the third quarter. It also led the field in market share with 31.7% compared to 30.2% share for second-place contender HP. Last year, IBM held 30.6% share compared to 30.1% for HP.

Dell remained third for this period with 13.4% share, up from 11.9% last year. Sun held onto fourth place, but saw its overall share fall to 7.4% from 9.2% for the year-ago quarter.

Some VARs are too jaded by the continuing recession and the IT spending slowdown to read much good news into Gartner's numbers. One reseller said she has seen no server hardware sales pickup except in accounts that qualify for TARP stimulus money. Another VAR executive said he sees nothing to justify Gartner's view that things are getting better. This Philadelphia-area HP partner said server sales are still "way off" and not trending up, even quarter to quarter. He and several VARs said companies continue to defer purchases until they're sure a recovery is underway.

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