Sign Of Times For Servers As Dell Gains; Devices Become Commodities.(INTERNET & TECHNOLOGY)

Byline: KEN SPENCER BROWN

If there was any lingering doubt about whether servers are becoming a commodity, Dell dispelled them with its third-place showing in two recent market-share studies.

The direct personal computer firm grabbed 14.8% of U.S. server sales in the first quarter, according to Gartner Dataquest. That knocked Sun Microsystems to No. 4 with 11.6%. Sun retained its worldwide lead with a 12.8% share vs. Dell's 8.7%. Dell's sales grew 25% to $1.17 billion, Gartner said.

International Data Corp. shows Dell and Sun in a statistical dead heat for No. 3 worldwide, with sales within 1% of each other. That study gives Sun a slight edge, with a 10.2% share vs. Dell's 9.8%.

Overall server sales rose 7.3% to $11.5 billion in the quarter. Dell wasn't the only big winner. IBM, the industry leader, also posted gains, while No. 2 Hewlett-Packard lost ground.

Dell was seen as the biggest mover. "It really illustrates how far Dell has come," said IDC analyst Mark Melenovsky. "Back in 1998 and 1999, there were a lot of people questioning whether Dell was a real server player."

It's the first time Dell has cracked the top three. It was boosted by the shift away from pricey Unix machines to cheaper servers not much different from PCs -- Dell's forte.