In the world of servers, the commodity Intel server is currently dominant, but not by as much as you might think. It accounts for around 50% of all revenue spent on servers. Despite predictions that the Unix server market would enter terminal decline, being overwhelmed by loosely coupled commodity Intel servers, Unix is still going strong. Unix servers, primarily running Solaris, HP-UX and AIX, still account for about 35% of all server revenues. In fact, in growth markets (China, India, Russia, Brazil, Korea, etc.) Unix has a larger share; 38% of the market compared to around 30% in North America and most of Europe.

A Tale of Three Chips

Now take a look at the graph below. It’s from IDC (with annotation by IBM) and it shows the market share movement of the big three Unix players from 1999 up to now. You could title it, the inexorable rise of IBM’s P Series. In the period from late 2000 to Q2 2009, IBM has more than doubled its market share to a level previously unequalled by any vendor. IBM is walking away with the market, while both Sun and HP shed market share in roughly equal measure.

Although it would be an oversimplification, you can look at this as the tale of 3 chips, Sun’s SPARC chip, the Intel/HP Itanium and IBM’s Power chip. Take a look at the recent record of benchmarks carried out by these vendors and the Power chip is so far ahead it’s embarrassing. Someone should stop the fight.

After the dot com collapse stripped Sun of a good deal of its revenues, it was always going to have a hard time funding the continued evolution of SPARC. In contrast, HP has no-one to blame but itself. Itanium looks very much like a failure of engineering. You either have to conclude that HP made the wrong technology bet or that IBM’s engineering team has performed out of its skin. Either way, as the graph so clearly indicates, HP has only just been able to keep pace with Sun and IBM has been picking the pockets of both vendors.

If you look at this graph, the logic of IBM’s bid for Sun was clear. It would have instantly put IBM in the catbird seat. SPARC would have been laid to rest, IBM would have migrated the Sun customer base and HP would have struggled to stay relevant. But Sun balked at IBM’s terms, and Oracle stepped in.

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