Server revenues double forecast

By Matt Whipp

Posted on 26 Nov 2003 at 16:15

IDC has released its latest figures for the server market in Q3 of this year, showing revenues up by 1.9 per cent rather than the expected 1 per cent.

In the second consecutive quarter of growth following nine of decline, revenues for the sector came in at $10.8bn, with IBM and HP in spots one and two taking 58.8 per cent of the market.

Both Sun and Fujitsu-Siemens lost market share, with Dell the only other major manufacturer to gain ground.

High growth was reserved for the 'volume server' segment, with revenues up 9.5 per cent, but pushing overall unit shipments up 19.5 per cent. Fuelled by tight IT budgets, these sub-$25,000 machines should also be attractive in the variety of uses to which they can turned and their appeal to the small business market.

'Volume servers are generating most of the positive momentum in the worldwide server market,' said Vernon Turner, group vice president of IDC's Worldwide Server Group. 'This shows that the IT community has embraced volume server deployments as a mainstream technology to meet a wide range of data-processing requirements and to support a wide variety of computing workloads. However, two quarters of positive growth do not necessarily mean that a long-lasting economic rebound is in place.'

In terms of operating systems, Unix continues to lose ground to the encroaching Windows and Linux machines.

While Linux continues its ballistic ascent, with a 49.8 per cent rise in revenues and 51.4 per cent shipment increase year on year. Moves such as Red Hat's March launch of Enterprise Linux WS and ES - aimed at the workstation and entry level/departmental markets respectively - would again find favour in the 'volume server' area.

But even with revenues of $743mn, Linux is still playing catch up to Windows, which pulled in $3.4bn for the quarter - an increase of 10.3 per cent year on year and almost a third of overall revenues. Unit shipments gained more than 20 per cent too. IDC put the rosy figures down to increasing numbers of Windows upgrades and increased prices.

Unix server revenues dropped 3.8 per cent for the quarter, although cheap prices saw an increase of shipments, up 4.3 per cent year on year.