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Sun unseated as Unix leader?
...or so it seems....

By Stephen Shankland

Published: Tuesday 30 August 2005

IBM and Hewlett-Packard have narrowly edged past longtime leader Sun Microsystems in the worldwide market for Unix servers according to some analyst reports.

In the second quarter of 2005, IBM's Unix server revenue was 31 per cent of the $4.3bn market, according to analyst research firm IDC, while HP had 30 per cent and Sun 29.5 per cent. Sun has lost its lead in various quarters before, but until now had kept the top rank for the second quarter, the last in its fiscal year and one in which its sales are typically stronger.

IDC released its figures last Friday. But those released Wednesday by Gartner tell a different tale, with Sun holding its Unix lead. Gartner's figures gave Sun 33 per cent of a $4.2bn market, with HP at 29 per cent and IBM at 28 per cent.

The two analyst firms might not agree on the precise ranking, but they agree in the general direction: IBM has been gaining at Sun's expense. Gartner, for example, showed IBM's Unix revenue increasing 33 per cent, HP's increasing six per cent and Sun's decreasing seven per cent.

Sun prefers to steer market-watchers toward unit shipments rather than revenue, arguing that "volume begets volume" as large quantities of servers mean large numbers of customers who become candidates for future sales.

Looking at units also puts Sun in a more flattering light. IDC analyst Jean Bozman said: "In terms of shipments, Sun is always outshipping IBM and HP."

Unix servers are a major part of the overall server market, which IDC said grew 5.6 per cent to $12.2bn in the second quarter. They're often used for more demanding tasks such as running corporate financial transactions or large databases, and such high-end systems often lead to sales of accompanying storage systems, software and services.

Sales of midrange Unix servers - those costing between $25,000 and $249,999 - grew 15.6 per cent in the second quarter, while high-end systems - those costing $500,000 and up - grew 19.2 per cent, Bozman said.

Gartner and IDC both rank IBM as the overall market leader, with HP second, Sun third and Dell a close fourth.