According to research firm International Data Corp., factory revenue in the worldwide server market increased 12.1% year over year to $11.9 billion in the first quarter of 2011, the fifth consecutive quarter of year-over-year revenue growth. Hewlett-Packard held the number 1 position in the worldwide server market with 31.5% factory revenue share for 1Q11.

IBM held the number 2 spot with 29.2% share for the quarter as factory revenue increased 22.1%. Dell maintained third place with 15.6% factory revenue market share in 1Q11 factory revenue increased 9.7% compared to 1Q10. Oracle, which completed the 1-year anniversary of its Sun Microsystems acquisition on Jan. 27, maintained the number 4 position with 6.5% factory revenue share in 1Q11.

Oracle's 1Q11 factory revenue increased 13.6% compared to 1Q10, driven in part by improved demand for SPARC-based servers. Fujitsu rounded out the top 5 with 4.8% factory revenue share following a 15.6% year-over-year decline in server revenue.

Fujutsu had $578 million in server revenues in the first quarter of 2011, compared with $685 million in the first quarter of 2010.
Fujitsu is the only Japanese manufacturer in the top five server manufacturers. Its results this year are expected to take a dive as a result of production problems brought by the earthquake in Japan. Fujitsu though could expect to get a boost if it successfully penetrates the North American market.

Japan Earthquake

Late April, Fujitsu reported consolidated net income of 55.0 billion yen (US$663 million) for fiscal 2010 (April 1, 2010 - March 31, 2011). Net income fell short of the company's January 28, 2011 projections after the March 2011 earthquake in eastern Japan caused disruption to Fujitsu manufacturing plants, regional logistics and customer facilities.

Net sales for fiscal 2010 amounted to 4.53 trillion yen (US$54.6 billion), a decline of 3.2% from fiscal 2009. In Japan, sales were essentially flat at 2.94 trillion yen (US$35,434 million). Higher sales of LSI devices and electronic components were offset by temporary production stoppages and shipment delays. Net sales outside of Japan were 1,587.3 billion yen (US$19,124 million), a decrease of 9.2% from fiscal 2009, primarily attributable to yen appreciation.

According to Fujitsu, as a result of the March 11 earthquake and tsunami in Japan, certain buildings and production equipment at plants where the Fujitsu Group manufactures semiconductors, x86 servers, desktop PCs, network products, and mobile phones sustained damage. In addition, plant operations were impacted due to a halt to lifeline systems such as electricity, water, and gas.

Fujitsu said an extraordinary loss of 11.6 billion yen ($142 million) has been posted to cover costs to restore damaged assets, as well as fixed costs during the plants' non-operational period and loss on disposal of inventories. Operating income decreased by approximately 13 billion yen, primarily due to the impact of decreased sales on account of delays to product delivery and shipments.

As of April 20, 2011, all of the above facilities had recovered 100% production capacity. However, the effect on consolidated results in the fiscal year ending March 31, 2012 is unknown at this time. This is due to concerns over the procurement of raw materials and components, as well as the increasing uncertainty on domestic ICT investments.

Global Cloud Computing Platform

Fujitsu pinning its hope in North America, a market dominated by U.S.-based server manufacturers.

Fujitsu said it is launching its cloud computing platform in North America beginning May 31. The offering will be an Infrastructure-as-a-Service cloud complete with computing, storage and networking delivered via a self-service portal.

The U.S. service will be delivered from the Fujitsu green data center in the heart of Silicon Valley, enabling organizations to cut information and communications technology (ICT) costs by as much as 40% while significantly reducing their carbon footprint.
The same service is already available in Singapore, Japan, Australia and the United Kingdom. Fujitsu's IaaS cloud is built on open standards with published APIs and includes 24/7 global support for the infrastructure platform.

North American customers can use the cloud for free until Aug. 31; it becomes generally available on Sept. 1.