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Server Market Flat in Q1 2002

The latest server shipment stats from Gartner Dataquest show a server market that remained flat for the first quarter of 2002 while Dell gained and most of its competitors lost.

by Amy Newman of serverwatch.internet.com [May 2, 2002]

According to Gartner Dataquest, worldwide server shipments totaled 1.09 million for the first quarter of 2002. This is an increase of 0.6 percent over the first quarter of 2001, according to Gartner Dataquest's preliminary statistics.

"The economic downturn and weak global business environment continue to have a great impact on customers' buying behavior," said Shahin Naftchi, senior analyst covering servers for Gartner Dataquest's Computing Platform Worldwide program.

"Businesses are not ready to spend on tech products unless it's absolutely crucial. Customers mostly purchase the least expensive systems to meet their short-term needs and can show a quick return on their IT investment," Naftchi added.

Compaq remained in the top spot with 22.8 percent of the worldwide server shipments, followed by Dell and IBM, which increased 17.8 percent and 14.3 percent, respectively. In addition, Dell was the only vendor to record positive double-digit year-over-year growth.

Surprisingly, the U.S. server market fared better than expected in the first quarter of 2002. It experienced a 7.6 percent increase.

Here, Dell led the way, increasing its lead with 26 percent of unit shipments. Compaq followed with 21.4 percent.

"Dell's build-to-order model allows it to rapidly pass along component price reductions to its customers, thereby improving its price competitiveness," said Jeffrey Hewitt, principal analyst for Gartner Dataquest's Servers Worldwide program.

According to Gartner Dataquest analysts, it appears that the U.S. market is starting to stabilize. However, because of the length of server purchasing cycles, market performance for the next two quarters will be crucial in providing a better indication of server market recovery.

Final statistics will be available shortly to clients of Gartner Dataquest's Servers Quarterly Statistics program.

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