Oracle Sun server hardware sales nosedive

Oracle Sun server hardware put up poor numbers in the first quarter this year, diving below Fujitsu and into fifth place.

Oracle server hardware revenue dropped almost 40% compared with Sun's first quarter last year, according to numbers released by Gartner. The freefall has left the company – which just closed its acquisition with Sun Microsystems in the first quarter – with less than 6% market share in terms of revenue and only 2% in terms of server shipments. HP is the leader, followed by IBM, Dell and Fujitsu.

Every server hardware vendor had double-digit increases over last year in shipments except for Oracle, which saw an almost 30% drop. Oracle clearly has major ground to make up if it wants to be a contender in the server hardware business.

Gartner also reported a steep 27% revenue decline in the Unix market, which is where Oracle has said it wants to focus with its Sun Sparc server hardware.

“Challenges remain in this segment as the longer sales cycles that we see for these platforms are currently compounded by significant product refreshes for both IBM and HP,” Adrian O’Connell, principal research analyst at Gartner, said in a statement. “The integration of Sun into Oracle is an additional factor that complicates current levels of demand. We expect demand in this segment to improve during 2010, but the vendors in this segment will be facing increasing challenges from Windows and Linux platforms.”

The x86 market, which Oracle executives such as CEO Larry Ellison have said the company wants to de-emphasize, saw a 32% jump in server hardware revenue compared with the first quarter last year.

”We’ve seen a pronounced bifurcation between x86 and other server platforms at the start of 2010,” O’Connell said. “Typically, x86 tends to be the platform that drives growth in the market, but the pent-up demand within the x86 installed base – where lifecycles had been extended during the downturn – as well as shorter sales cycles in this area, have led to divergence in growth between x86 and other platforms this quarter.”

Mark Fontecchio can be reached at [email protected].