May 25, 2010 / 8:15 PM / 9 years ago

HP overtakes IBM as top server maker by sales

BOSTON (Reuters) - Hewlett-Packard Co overtook IBM as the world’s top server maker by sales during the first quarter as customers held off on buying equipment from IBM before new product launches, a research firm said on Tuesday.

HP sales of business servers climbed 15.9 percent from a year earlier to $3.4 billion during the first quarter, giving the company 31.5 percent of the market. International Business Machines Corp saw sales drop 2.1 percent to $3.1 billion.

IBM has long lagged behind HP in the number of units it ships because its strength is in high-end mainframe computers and Unix servers. Gartner said customers held off on buying both those product lines from IBM as the computing giant gets ready to release next-generation versions later this year.

Gartner also said the number of servers sold grew 23 percent during the first quarter, while revenue increased 6 percent to $10.8 billion on a steep decline in high-end servers.

Dell Inc, the No. 3 maker by sales, posted the strongest growth among top vendors during the quarter, with server revenue up 36 percent.

Oracle Corp’s Sun Microsystems division posted the sharpest decline, with server revenue off 39 percent during the quarter.

After Oracle completed its $5.6 billion acquisition of Sun in January, Chief Executive Larry Ellison cut back on the company’s line of servers and its marketing budget, saying that Sun had regularly sold products at a loss.

Reporting by Jim Finkle; Editing by Richard Chang

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