Ibm Swot Analysis

IBM MARKET POSITION

HP passes IBM in server market share as segment booms

The server market grew well in the first quarter of 2008, with HP finally edging past IBM to claim the highest server market share. Volume server sales remain strong in all markets, while Itanium sales are edging up in emerging growth areas.

Talks of recession and the skyrocketing price of oil may have Americans watching the economy anxiously, but according to Gartner's report on server revenues through the first quarter of 2008, that segment of the market is still running strong. Both server shipments and server revenue grew in Q1 2008 by 7.6 percent and 4.3 percent, respectively, as Hewlett-Packard overtook IBM in worldwide server market share.

Industry growth was driven by fresh demand for x86-based servers as older units were retired and by strong expansion in emerging markets. None of this growth touched the RISC-Itanium Unix market, where shipments fell 8.4 percent quarter-on-quarter. Revenue, however, was up a slight 3.7 percent. Systems in this market segment, as the name implies, are based on non-x86 architectures including IBM Power, Intel Itanium Product Family (IPF), and Sun UltraSPARC.

RISC-Itanium products are important revenue generators for all of the major computer manufacturers, but demand for products in this segment currently varies significantly from region to region. According to an IDC report released earlier this year, x86 servers are continuing to push RISC-Itanium servers out of the Western European market, while demand for these servers is increasing in Central Europe, Eastern Europe, the Middle East, and Africa. Revenue from IPF server sales rose 130 percent from 2006 to 2007 in these markets, though that number is fairly useless without additional data on the total number of units shipped.

IPF sales are also growing in the Asia-Pacific market; HP reported 46 percent revenue growth year-on-year at the end of 2007 for this region. Gartner notes that the...