Server sales tick up, more to come

Server revenues climbed 2.5 percent in the past year according to IDC’s quarterly worldwide server tracker. In the second quarter of 2014 sales totalled US$12.6 billion. Unit shipments grew 1.2 percent to 2.2 million.

The standout segment was mid-range systems which saw 11.5 percent growth. IDC puts the surge down to technology refresh cycles. Volume systems climbed 4.9 percent. Meanwhile high-end enterprise systems dropped almost 10 percent.

HP moved into top slot with a 25.4 percent market share for the quarter. This time last year IBM was the leader, but with year on year sales revenue down more than 10 percent the company is now in second place with a 23.6 percent market share. The company’s share will fall faster thanks to Lenovo buying part of IBM’s server business.

Dell, Oracle and Cisco are runners-up. Cisco’s revenue jumped by over 35 percent putting it in joint fourth place with Oracle. IDC lists the little-known companies making cloud servers as ODM Direct. They collectively scored a 6.6 percent market share.

IDC says the market is going through a refresh cycle with servers being replace. The analyst company expects this to continue for the next year or so with Microsoft’s decision to end Windows Server 2003 support likely to further stimulate sales. Also on the horizon is Intel’s Grantley Xeon technology.

Apple, Microsoft — two tablet visions

When Steve Jobs took the wraps off Apple’s first iPad, he showed an entirely new class of device. The iPad was neither a new type of PC nor was it just a giant smartphone. It opened new territory.

Apple sold the original iPad as a personal digital media consumption device. It stuck with that approach for the first three tablet generations. It wasn’t until the iPad Air arrived that Apple’s marketing bowed to the inevitable and admitted tablets are also useful for creating content and as business tools. Even now that’s not the main sales pitch.

Google doesn’t sell its own tablets. When the company’s partners began selling Android tablets they all followed Apple’s lead. Samsung took great pains to emphasis the entertainment and media consumption aspects of its Galaxy Tab S. Business takes a back seat.

Microsoft Surface — productivity first

That’s not how Microsoft views tablets. Even before CEO Satya Nadella told the world Microsoft is now a ‘productivity and platform’ company, Microsoft emphasised the Surface range are business tools.

This explains why Surface evolved quickly in just 18 months and three generations from tablets to tablet-cum-laptops.

The way Microsoft’s marketing says the new Surface Pro 3 is a “PC when you need it and a tablet when you want one” speaks volumes. The implied message is “you need a laptop to do real work, but tablets have a place too, so here’s something covering both bases”.

It’s no accident that almost every Surface buyer picks up a keyboard along with their tablet.

How does this play out in business?

You could argue the Surface, particularly the Surface Pro 3, is the kind of tablet corporate technology buyers always wanted. That’s clearly the market Microsoft wants.

And yet, Apple does a great job selling iPads to large companies. If I walk into any CBD glass tower I’ll almost certainly see people walking around with iPads.

The iPad took root in business from the bottom up. People who bought iPads for personal use took them to the office and found new ways to be productive. In some cases using third-party add-ons and apps from the iTunes store. Companies had little choice but to adapt to this trend, hence all the hand-wringing you hear about BYOD, bring your own device.

I’ve no evidence, but I suspect most Surfaces are bought either by companies who give them to staff as productivity tools or by people who are deeply committed to Microsoft products and services. I also suspect many Surfaces replaced PCs.

One device or two?

Microsoft thinks you need only one device to do two jobs. The Surface Pro 3 is quite possibly the best Windows laptop. It’s a nice tablet, but not fabulous and it is expensive.

In Apple’s world, there are two jobs requiring two tools. The tablet is a consumption device. If you are serious about creating content, then you should buy a MacBook. You are, of course, welcome to buy both.

Apple is doing something right. While iPad sales have hiccupped, sales of the company’s innovative laptops continue to rise. Windows laptop sales are falling, attacked from above by Apple and from below by the Chromebook.