Dell leads server sales growth amid strategy shift

SAN FRANCISCO (Reuters) - Dell Inc had the fastest revenue growth among makers of large server computers in the second quarter, outpacing IBM, Hewlett-Packard Co and Sun Microsystems, Inc as a new business strategy began to pay off, IDC said on Wednesday.

Dell's revenue from the sales of servers, used to run corporate networks and Web sites, jumped 20.2 percent to $1.53 billion in the period, IDC estimated in its quarterly survey of worldwide server sales.

Dell, the world's second-largest personal computer maker after HP, remained in fourth place in server market share, claiming 11.6 percent of total server revenue in the quarter.

International Business Machines Corp kept the top server-revenue market share spot with 31 percent, after growing 6.4 percent from a year earlier to $4.07 billion, IDC said.

HP's server revenue rose an estimated 8 percent to $3.71 billion, keeping it in second place and giving it 28.2 percent of the worldwide server market. Sun Microsystems' server revenue rose 5.6 percent to $1.71 billion, the third-highest ranking. It had 13 percent of the market, IDC estimated.

Dell has modified its server business by introducing more energy-efficient machines and offering computers with processor chips from both Intel Corp and Advanced Micro Devices, Inc, after earlier only offering Intel-based computers.

The company also has set out to improve its supply chain logistics, including manufacturing and shipping, after hiring former Solectron Corp Chief Executive Michael Cannon in February to oversee operations.

IDC said overall server market revenue grew 6.3 percent to $13.1 billion in the second quarter, the fifth consecutive quarter of revenue growth, as businesses bought more servers costing less than $25,000. That low end of the server market had revenue growth of 11 percent from the year-earlier period.

So-called blade servers, which stand on end like books on a shelf, accelerated for a third consecutive quarter and were the fastest-growing server segment as companies sought to cut energy costs and make their data centers more efficient.

IDC's findings were similar to those of Gartner Inc, which on Tuesday showed Dell's server revenue growing 19.6 percent to $1.56 billion in the second quarter. According to Gartner, IBM held the top market-share spot, with 29.8 percent, followed by HP with 28.5 percent and Sun Microsystems with 13.5 percent.