IBM takes Unix crown
Austin-designed chip fueled Big Blue's march to the top.
By Kirk Ladendorf
AMERICAN-STATESMAN STAFF
Saturday, August 27, 2005
IBM Corp. captured its first No. 1 ranking in Unix computer sales in
years, capping nearly a decade of work led by researchers in Austin.
IBM captured 31 percent of the $4.3 billion in Unix server sales in the
second quarter, edging out Hewlett-Packard Co. and Sun Microsystems
Inc., who recorded 30 percent and 29.5 percent respectively, research
firm IDC said Friday.
IBM, which launched its new Power5 processor family of computers last
year, saw its Unix market share climb 6.9 percentage points from the
same quarter a year ago. Unix servers are favored by many corporations
for running business networks.
It was the first top ranking for IBM since the mid-1990s. Sun still
ranked well ahead of IBM in unit shipments of Unix computers.
"It feels really good," said IBM vice president Karl Freund. "It
happens maybe once in a career. You can point to the day we displaced
the two former market leaders. We went from the outhouse to the
penthouse, from last to first.
"Now we can celebrate. We have guys who were working for the last 10 to
15 years waiting for the day to be No. 1. There were guys with tears in
their eyes. This has been a lifetime mission for a lot of people. There
is a lot of emotion and a lot of satisfaction involved."
Gartner Inc., another research firm, showed IBM as No. 3 behind Sun and
H-P. But the data from the two firms often are different because they
use different methodology. Still, Gartner showed IBM's sales growing
much more quickly than either Sun's or H-P's.
IBM's gradual climb to the top in Unix sales also caps an eight-year
campaign that started with the company's multibillion-dollar bet to go
for a breakthrough in chip performance with the design of the Power4
chip in Austin.
IBM had to decide to spend several billion dollars both on the advanced
design of several new generations of chips and on the advanced
factories and process technologies required to make them.
At the time, computer buyers were beginning to favor the low cost of
Intel-based servers, using off-the-shelf chips and Microsoft Corp.
software. And hardware makers had to seriously consider whether they
wanted to continue to make the investment in their own chips and
software platforms that characterize Unix servers.
Sun and H-P sought out alliances to help them defray the heavy cost of
continued high-performance processor development. H-P bet heavily on
its alliance with Intel Corp. for the Itanium processor project, which
has generated only modest enthusiasm so far. Sun sought a partnership
with Fujitsu.
"They were backing off while we doubled down," Freund said.
The bet paid off: IBM made a big hit with the 2001 introduction of its
first servers to use the Power4 chips. The new computers gave IBM a
performance edge on the competition, and it has been gaining ground in
sales ever since.
Its market share climbed to 24 percent by 2003 from 16.9 percent in
2000, according to IDC data.
Freund said he expects IBM to continue to win market share at the
expense of its rivals over the next several years because it is
continuing to drive performance gains and the workload flexibility of
its machines.
Unix computing refers to computers that use one of the variants of the
Unix operating system developed by AT&T in 1969.
Although Unix has never reached the mass market acceptance of
Microsoft's Windows operating system, Unix computers are still
preferred by many large companies because of reliability. Strong
markets for Unix include telecom companies and financial services
companies that use the machines for so-called mission-critical
applications, such as handling online financial transactions.
Linux, a fast-growing new category in computing, is a lower-cost
open-source offshoot of Unix.
Servers using this software are counted separately from Unix by IDC.
Linux server revenue topped $1.4 billion in the second quarter,
capturing an 11.5 percent share of the overall market with 45.1 percent
growth from a year ago.
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