Server Wars - HP and IBM Go After Compaq
Death, taxes, and Compaq with dominant server share. Two of those three things are certainties in life, and one is a
certainty in the market for Intel based servers. However, looking at recent data from ZD Storeboard, it appears that the
third part of the trilogy might be encountering a bit of pressure. For roughly the last two years, Compaq has maintained
roughly 60-70% market share of Intel Servers sold through the channel. With a blip here or there, the shape of the
market share curve has remained pretty stable, up until June of this year.
While things did bounce back for Compaq in July, the sense I get from looking at the data is that the curves and the
actions of HP and IBM seem to indicate that we've seen the last 70% channel share month for Compaq for a while. The
reality is that servers are now so critical to profits in the Intel-based systems business that neither IBM or HP can
afford to allow Compaq to continue at these historically high share levels.
So the combination of better products, renewed emphasis on sales programs, and better sales tactics to support
servers have allowed HP and IBM to eat into Compaq's share a bit. The result is that for the first time in a long while,
both HP and IBM have share of sales that is at 20%. This is new news.
However, while the trend is clear, there is one caveat. Overall sales of servers in August were down significantly, both
sequentially and year-over-year. So one has to be careful in analyzing the latest decline. The decline, in August, is not
due to a shortage of Compaq product, but rather it is due to a success by HP and IBM. Looking at Compaq's history,
their sales out can fluctuate, but historically not by this much.
The only real answer to the question will be to see how sales results turn out for September. Typically, servers see
more sales in the last month of the quarter than do PCs. So check back here at InfoBeads Insider to get the details, and
see if the server business is becoming more competitive, and no longer a captive market for Compaq. |
