HP claims top spot in server market

Hewlett-Packard (HP) (NYSE: HPQ) led all companies in Latin American server sales for the second quarter of 2003, with a 16.1% share of the market, HP said in a statement, citing new research from technology market observer IDC. HP said it increased server sales in Latin America by 17% from the same period last year but did not reveal billing figures. HP does not disclose regional breakdowns for its server sales, according to Andres Campuzano, the company's regional marketing manager for industry standard servers. HP is second behind IBM (NYSE: IBM) in worldwide server sales, according to a separate statement from IDC. IBM led all manufacturers with a 30.4% share on sales of US$3.23bn for the second quarter, compared to HP's 27.7% share and US$2.9bn sales. The global server market billed US$10.6bn for the quarter, up only 0.2% from last year, despite a 17.5% increase in shipments to more than 1.2 million units, IDC reported. An earlier study by another consulting firm, Gartner, found Latin American server shipments increased 6.6% to 35,359 units for the second quarter of 2003. Total server sales declined 1.8% to US$312mn over the same period. IDC said the figures are a clear demonstration that sales prices in the worldwide server market are continuing to slide. Server manufacturers are turning to value added software and services to counter the decline in server prices, Campuzano said. "Hardware prices are falling and it's not easy to keep cutting them," he told BNamericas. In May HP introduced its "Adaptive Enterprise" strategy, a wide-ranging initiative that aims to insert software and IT services at the center of the server market. Servers are now bundled with solutions that address a range of business demands from IT infrastructure management to enterprise software and security. Backing up these value added solutions is HP's "Darwin" systems architecture, designed to automatically adjust to changes in a business. "We've designed the whole process strategy around making sure [a company's IT] infrastructure is adaptable to changes in business strategy," Campuzano said. Campuzano said a more efficient server administration reduces the cost of maintaining servers over their complete life cycle. "The cost of hardware acquisition is only the tip of the iceberg," he said. To keep maintenance costs in check over the long term, companies need to focus on cutting underlying costs such as server management and data centers, he said.