A week after becoming the world's top PC seller, Dell Computer has for the first time wrenched the US server crown from Compaq Computer.
But Compaq is "declaring war" to defend its core turf, according to an internal memo.
Dell sold 38 percent of the 247,500 Intel servers sold in the United States during the first quarter, while Compaq sold 32 percent, according to preliminary figures from Dataquest.
The market itself shrank 1.7 percent in the first quarter compared with the same period last year, Dataquest said. Dell was able to boost its share by increasing unit shipments 32 percent. Compaq's shipments plummeted 17 percent.
The news comes a week after Dataquest said Dell had for the first time won first place in the worldwide computer market - statistics that include servers as a relatively small subset. Although PCs ship in much larger numbers, servers - which often have multiple processors and other high-end features - cost more and come with better profit margins.
But Compaq isn't going down without a fight. The company still leads in worldwide sales for Intel servers, which is one of its largest revenue sources.
"Today I am declaring war. I want everyone to understand the seriousness of the situation and make the defense of our server superiority a top priority," Jim Milton, general manager of Compaq's North American server business, said last week in the internal memo. "This is a fight for server leadership, and right now our lead is threatened."
Milton gave the Compaq sales force permission to aggressively defend its turf. "To support you, we have expanded your ability to compete on price," he said in the memo.
Server sales
Here are preliminary first-quarter figures for Intel-based servers from the top five companies.
Company Number Market share
Dell 94,700 38.3%
Compaq 79,900 32.3%
IBM 31,000 12.5%
HP 19,600 7.9%
Gateway 5,500 2.2%
Source: Dataquest
It's not the first time Compaq has gone after Dell. Last year, the company launched its "Dell Win Back" program to protect or snatch back top customers.
However, Dell spokesman Bruce Anderson said his company is in the midst of an inexorable march to further its gains. "The US comes first; worldwide comes second," Anderson said.
At the same time, Dell faces its own hurdles. The company is gaining market share, Technology Business Research analyst Brooks Gray said, but not as fast as it wants or plans.
"They know they need to grow their server and storage revenue much faster than they have. That's going to be difficult given the current (economic) conditions," Gray said.
